ip_handbook.pdf | World Intellectual Property Organization | Intellectual Property

WIPO INTELLECTUAL PROPERTY HANDBOOK

WIPO PUBLICATION No. 489 (E) ISBN 978-92-805-1291-5 WIPO 2004
Second Edition

Reprinted 2008

Detailed Table of Contents
Chapter 1

Introduction

The Concept of Intellectual Property The World Intellectual Property Organization (WIPO)
History Mission and Activities Structure Administration Membership Constitutional Reform Wider Consultation and Outreach

3 4
4 5 7 8 9 9 12

Chapter 2

Fields of Intellectual Property Protection Patents
Introduction Conditions of Patentability Drafting and Filing a Patent Application Examination of a Patent Application Infringement Exploitation of the Patented Invention Compulsory Licenses Utility Models

17
17 17 22 24 27 33 34 40

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WIPO Intellectual Property Handbook: Policy, Law and Use

Copyright and Related Rights
Introduction Copyright Protection Subject Matter of Copyright Protection Rights Comprised in Copyright Related Rights Ownership of Copyright Limitations on Copyright Protection Piracy and Infringement Remedies Intellectual Property and Traditional Cultural Expressions Trends and Experiences in the Protection of TCEs Conceptual and Policy Questions Recent and Possible Future Developments

40
40 41 42 43 46 49 50 51 52 56 64 66 67

Trademarks
Introduction Definitions Signs Which May Serve as Trademarks Criteria of Protectability Protection of Trademark Rights Use Requirements Trademark Registration Removal of the Trademark from the Register Trademark Piracy, Counterfeiting and Imitation of Labels and Packaging Change of Ownership Trademark Licensing Trade Names Franchising Character Merchandising

67
67 68 70 71 77 77 79 82 90 92 94 96 97 105

Industrial Designs and Integrated Circuits
Industrial Designs Integrated Circuits

112
112 118

Geographical Indications
Introduction Protection of Geographical Indications on the National Level Protection of Geographical Indications on the International Level through Multilateral Treaties Protection of Geographical Indications on the International Level through the Provisions of Bilateral Agreements

120
120 122 124 129

Protection Against Unfair Competition
Introduction The Need for Protection The Legal Basis for Protection The Acts of Unfair Competition

130
130 132 133 136

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iii

Chapter 3

The Role of Intellectual Property in Development and WIPO’s Development Cooperation Program Objectives of Developing Countries Industrial Property and Development
Industrial Property Protection and Development Inventions, Technology and Development

163 164
164 166

The Promotion of Innovation
Introduction A Global Approach to Establishing Innovation and Invention Support Structures or Services Implementing and Managing Innovation and Invention Support Structures and Services Innovation Center or Innovation Support Network

168
168 169 170 170

Licensing and the Transfer of Technology
Introduction The Commercial Transfer and Acquisition of Technology Negotiation of Licensing Agreements Remuneration Types of Intellectual Property Licenses Government Control of Licensing Agreements

172
172 172 178 184 188 193

Copyright and Development The Development Cooperation Program of WIPO
Introduction Objectives Development Cooperation in Relation to Intellectual Property The WIPO Worldwide Academy

195 196
196 196 197 202

Chapter 4

Enforcement of Intellectual Property Rights Enforcement of Industrial Property Rights, Copyright and Related Rights
Introduction Enforcement of Industrial Property Rights in General Enforcement of Patent Rights Enforcement of Copyright and Related Rights Activities Within WIPO Concerning Enforcement Enforcement Provisions of the TRIPS Agreement

207
207 208 211 213 219 220

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WIPO Intellectual Property Handbook: Policy, Law and Use

Intellectual Property Litigation
Introduction Review of Industrial Property Office Decisions Infringement Actions Remedies

220
220 220 225 228

Arbitration and Mediation of Intellectual Property Disputes
Alternative Dispute Resolution Enforcement in the International Context WIPO Arbitration and Mediation Center WIPO Internet Domain Name Dispute Resolution

230
230 231 232 234

Chapter 5

International Treaties and Conventions on Intellectual Property The Paris Convention for the Protection of Industrial Property
History Principal Provisions Administrative and Financial Provisions

241
241 242 259

The Berne Convention for the Protection of Literary and Artistic Works
History Principal Provisions The Latest (Paris) Act of the Convention Administration Developing Countries and the Berne Convention

262
262 262 265 266 267

The WIPO Copyright Treaty (WCT)
Introduction Legal Nature of the WCT and its Relationship with Other International Treaties Substantive Provisions of the WCT Administrative Provisions

269
269 269 270 276

The Patent Cooperation Treaty (PCT)
Introduction The Functioning of the PCT System Advantages of the PCT System

276
276 278 282

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The Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure
Background to the Treaty Summary of the Treaty Main Advantages of the Treaty

285
285 285 286

The Madrid Agreement Concerning the International Registration of Marks and the Protocol Relating to the Madrid Agreement
Introduction The Functioning of the System of International Registration Becoming Party to the Agreement or Protocol Advantages of the System

287
287 288 292 292

The Hague Agreement Concerning the International Deposit of Industrial Designs
Introduction The Principle of International Deposit Main Provisions of the Hague Agreement Benefits of Accession to the Hague Agreement The Geneva Act of the Hague Agreement

293
293 293 293 295 296

The Trademark Law Treaty (TLT)
Introduction Provisions of the Treaty and the Regulations

297
297 297

The Patent Law Treaty (PLT)
Introduction Provisions of the Treaty and the Regulations Advantages of the PLT

301
301 301 305

Treaties on Classification
Introduction The Strasbourg Agreement Concerning the International Patent Classification The Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks The Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks The Locarno Agreement Establishing an International Classification for Industrial Designs

305
305 305 308 311 313

Special Conventions in the Field of Related Rights: The International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (the “Rome Convention”) 314
Introduction Relation Between the Protection of Related Rights and Copyright Principal Provisions 314 315 316

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WIPO Intellectual Property Handbook: Policy, Law and Use

The Implementation of the Rome Convention The Rome Convention and Developing Countries

319 319

Other Special Conventions in the Field of Related Rights
The Other Special Conventions Reasons for and Purposes of the Special Conventions Main Features of the Special Conventions Substantive Provisions of the Phonograms Convention Substantive Provisions of the Satellites Convention The Phonograms and Satellites Conventions and Developing Countries

320
320 321 322 323 323 324

The WIPO Performance and Phonograms Treaty (WPPT)
Introduction Legal Nature of the WPPT and its Relationship with Other International Treaties Substantive Provisions of the WPPT Administrative Provisions Audiovisual Performances

325
325 325 326 331 331

The International Convention for the Protection of New Varieties of Plants
Introduction The International Union for the Protection of New Varieties of Plants (UPOV) The 1991 Act of the UPOV Convention Developments in Plant Variety Protection

331
331 332 335 345

The Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) and WIPO-WTO Cooperation 345
Introduction General Provisions, Basic Principles and Final Provisions (Parts I and VII) Standards Concerning the Availability, Scope and Use of Intellectual Property Rights (Part II) Enforcement of Intellectual Property Rights (Part III) Acquisition and Maintenance of Intellectual Property Rights and Related Procedures (Part IV) Dispute Prevention and Settlement (Part V) Cooperation between the World Intellectual Property Organization and the World Trade Organization 345 347 349 355 356 357 357

Progressive Development of International Intellectual Property Law
Introduction The Joint Recommendation Concerning Provisions for the Protection of Well-Known Marks The Joint Recommendation Concerning Trademark Licenses The Joint Recommendation Concerning the Protection of Marks, and Other Industrial Property Rights in Signs, on the Internet

360
360 361 361 362

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vii

Chapter 6

Administration and Teaching of Intellectual Property

Administration of Industrial Property
Introduction Administrative Structure in the Industrial Property Office The Patent Office The Trademark Office The Industrial Designs Office Intergovernmental Cooperation

367
367 368 369 372 375 376

Administration Of Copyright and Related Rights
The Role of Public Authorities in Copyright and Related Rights Collective Management of Copyright and Related Rights

386
386 387

The Patent and Trademark Attorney
Introduction The Functions of a Patent Agent Corporate Patent Attorneys Associations of Patent Agents The Functions of a Trademark Agent Skills and Knowledge of a Patent Agent

401
401 401 411 413 415 420

The Teaching of Intellectual Property Law
Introduction Intellectual Property Teaching Programs Selecting Intellectual Property Courses Choosing Teaching Materials and Writing a Syllabus Teaching Methods and Educational Strategies The Role of Teachers in the Legislative Process Training and Research Institutes for Intellectual Property Conclusion

421
421 422 425 426 428 429 430 431

Chapter 7

Technological and Legal Developments in Intellectual Property Computer Programs
Introduction Brief History of the Protection of Computer Programs Protection of Computer Programs under Patents Protection of Computer Programs under Copyright International Norms Concerning Copyright Protection of Computer Programs National Legislation on the Protection of Computer Programs Creation and Use of Works by Means of Computers Databases

435
435 436 436 436 437 437 439 441

viii WIPO Intellectual Property Handbook: Policy. Law and Use Biotechnology Introduction Adoption and Dissemination Need for Protection Existing Protection Traditional Knowledge 442 442 443 444 445 446 Reprography Reprography and Intellectual Property Audio and Video Recording 448 448 449 Communication Technologies Introduction Satellites Cable Distribution Digital Distribution Systems The Internet Electronic Commerce 450 450 451 453 454 455 455 A Complementary Approach to the Development of Intellectual Property Norms 457 WIPO Internet Domain Name Processes WIPO’s Global Network Standing Committees and Advisory Bodies 457 459 459 Bibliography .

Chapter 1 INTRODUCTION The Concept of Intellectual Property The World Intellectual Property Organization (WIPO) History Mission and Activities Structure Administration Membership Constitutional Reform Wider Consultation and Outreach .

Law and Use .2 WIPO Intellectual Property Handbook: Policy.

including indications of source and appellations of origin.” 1. phonograms and broadcasts. the more so as Article 1(2) of the Paris Convention for the Protection of Industrial Property (Stockholm Act of 1967) (the “Paris Convention”) includes “the repression of unfair competition” among the areas of “the protection of industrial property”. literary and artistic fields. service marks and commercial names and designations constitute the industrial property branch of intellectual property.5 The expression “industrial property” covers inventions and industrial designs.” that is.Introduction 3 The Concept of Intellectual Property 1. Here. “industrial property” and “copyright. scientific. rights related to copyright.1 Intellectual property.3 The Convention Establishing the World Intellectual Property Organization (WIPO). commercial names and designations. literary or artistic fields.” 1. creativity and the dissemination and application of its results and to encourage fair trading which would contribute to economic and social development. intellectual property law aims at safeguarding creators and other producers of intellectual goods and services by granting them certain time-limited rights to control the use made of those productions. industrial designs. artistic and scientific works belong to the copyright branch of intellectual property. The area mentioned as protection against unfair competition may also be considered as belonging to that branch. but what counts here is that the object of . The second is to promote. and protection against unfair competition.4 The areas mentioned as literary. The areas mentioned as inventions. the said Convention states that “any act of competition contrary to honest practices in industrial and commercial matters constitutes an act of unfair competition” (Article 10bis(2)). Intellectual property is traditionally divided into two branches. In addition. service marks. 1. service marks and commercial names and designations. protection against unfair competition. inventions are new solutions to technical problems and industrial designs are aesthetic creations determining the appearance of industrial products. artistic and scientific works.2 Generally speaking. The areas mentioned as performances of performing artists. One is to give statutory expression to the moral and economic rights of creators in their creations and the rights of the public in access to those creations. industrial designs. very broadly.Chapter 1 . the aspect of intellectual creations—although existent—is less prominent. phonograms and broadcasts are usually called “related rights. means the legal rights which result from intellectual activity in the industrial. 1. trademarks. performances of performing artists. scientific. 1967 (Article 2(viii)) provides that “intellectual property shall include rights relating to: literary. industrial property includes trademarks. scientific discoveries. Those rights do not apply to the physical object in which the creation may be embodied but instead to the intellectual creation as such. as a deliberate act of Government policy. Countries have laws to protect intellectual property for two main reasons. Simply stated. and all other rights resulting from intellectual activity in the industrial. trademarks. inventions in all fields of human endeavor. concluded in Stockholm on July 14.

Switzerland. 1. Both of these conventions provided for the establishment of international secretariats.6 Scientific discoveries. The World Intellectual Property Organization (WIPO) History 1. BIRPI moved from Berne to Geneva.8 Initially there were two secretariats (one for industrial property. Law and Use industrial property typically consists of signs transmitting information to consumers. However. to give WIPO the same status as all the other comparable intergovernmental organizations and to pave the way for it to become a specialized agency of the United Nations system of organizations. when WIPO was established. The Geneva Treaty on the International Recording of Scientific Discoveries (1978) defines a scientific discovery as “the recognition of phenomena. before it became WIPO. naturally. the acronym of the French-language version of the name: United International Bureaux for the Protection of Intellectual Property (in English). with the adoption of the Paris Convention and the Berne Convention respectively. the administrative and final clauses of all the then existing multilateral treaties administered by BIRPI were revised. Such solutions must. but in 1893 the two secretariats united. the Universal Postal Union (UPU) and the International Telecommunication Union (ITU) were in existence. The few officials who were needed to carry out the administration of the two conventions were located in Berne. They had to be revised because member States wished to assume the position of full governing body of the Organization (WIPO). such as the International Labor Office (ILO). The “Convention Establishing the World Intellectual Property Organization” was signed at Stockholm in 1967 and entered into force in 1970. 1. the origins of WIPO go back to 1883 and 1886. to new technical use. the invention. and independently of. The most recent name of the organization. thus removing the supervisory authority of the Swiss Government. and misleading practices in general. properties or laws of the material universe not hitherto recognized and capable of verification” (Article 1(1)(i)). the remaining area mentioned in the WIPO Convention. rely on the properties or laws of the material universe (otherwise they could not be materially or “technically” applied). They were created for the specific purpose of dealing with a particular subject or field of activity at the international level. one for copyright) for the administration of the two conventions. Inventions are new solutions to specific technical problems. whether they are recognized (“discovered”) simultaneously with the making of the invention or whether they were already recognized (“discovered”) before. but those properties or laws need not be properties or laws “not hitherto recognized.10 Most of the intergovernmental organizations now called specialized agencies did not exist before the Second World War. and both were placed under the supervision of the Swiss Federal Government. in particular as regards products and services offered on the market. However.” An invention puts to new use. was BIRPI. and that the protection is directed against unauthorized use of such signs which is likely to mislead consumers. In 1960. 1. some intergovernmental organizations.4 WIPO Intellectual Property Handbook: Policy. the said properties or laws. are not the same as inventions. and had become the responsible intergovernmental organizations in their respective fields of activity long before the establishment of .9 At the 1967 diplomatic conference in Stockholm. 1.7 The World Intellectual Property Organization (WIPO) is one of the specialized agencies of the United Nations (UN) system of organizations.

the successor to BIRPI. although it belongs to the family of United Nations organizations.Introduction 5 the United Nations. Its effect is to contribute to a balance between the stimulation of creativity worldwide. 1. All member States of the United Nations are entitled to become members of all the specialized agencies. became a specialized agency of the United Nations when an agreement was signed to that end between the United Nations and WIPO which came into effect on December 17. these organizations became specialized agencies of the United Nations system. subject to the competence of the United Nations and its organs. 1. to its own governing bodies. Each State decides for itself whether it wants. which are the States members of the organization. 1. responsible for taking appropriate action in accordance with its basic instrument and the treaties and agreements administered by it. Each specialized agency has its own constitution. namely. dissemination. its activities have not only expanded. 1. The Patent Cooperation Treaty (PCT). a new international treaty. its own governing bodies. the Patent Law Treaty. Although WIPO has maintained this function (it currently administers 23 such treaties). Machinery exists for coordinating the activities of all the specialized agencies. when it was created to serve as the secretariat of treaties concluded between States. among themselves and with the United Nations. the Madrid Agreement and Protocol Concerning the International Registration of Marks. retains its independence. 1. together with the consequential one of promoting intergovernmental cooperation in the administration of intellectual property. long before the United Nations was established. BIRPI was the responsible intergovernmental organization in the field of intellectual property. its own elected executive head. but also greatly diversified. 1974. WIPO.12 A specialized agency. under its own constitution. its own programs and activities. by sufficiently protecting the moral and material interests of creators on the one hand. its own budget. but in fact not all member States of the United Nations are members of all the specialized agencies.13 The agreement between the United Nations and WIPO recognizes that WIPO is. and providing access to the socio-economic and cultural benefits of such creativity worldwide on the other. its own income. but basically each agency remains responsible. After the United Nations was established. for promoting creative intellectual activity and for facilitating the transfer of technology related to industrial property to developing countries in order to accelerate economic. social and cultural development. valid in up to all States party to those treaties. use and protection of works of the human mind for the economic. To strengthen this aspect of WIPO’s work. or does not want. Mission and Activities 1. and the Hague Agreement Concerning the International Deposit of Industrial Designs have all given rise to an increased volume of registration activities. inter alia. the increase in the use of international treaties that create the facility of a single procedure to apply for patents and register trademarks and industrial designs. cultural and social progress of all mankind.14 The mission of WIPO is to promote through international cooperation the creation. to become a member of any particular specialized agency.11 Similarly. its own staff.Chapter 1 . Each specialized agency has its own membership.16 An outstanding example of the expansion of WIPO’s earlier work is the growth of its registration activities—that is to say. came into existence in June 2000: its purpose is .15 WIPO’s place on the international scene has greatly changed since its beginnings.

as will be seen in chapter 3.23 One of the most significant present-day tasks of WIPO is to demystify intellectual property. Disputes are handled and resolved online. Thus WIPO is increasingly involved in helping developing countries. which is to promote human creativity that results in industrial and cultural products and services enriching human society as a whole.17 In its more recent history. legal. 1. to the traditional notions and practices of intellectual property. including WIPO’s agreement with the World Trade Organization (WTO).and medium-sized enterprises (SMEs) as the backbone of market economies. whether farmers. without being physically present in the same place. through the WIPO Arbitration and Mediation Center (see chapter 4) has been extended to cover the problems arising from the misuse of domain names on the Internet. and has also given similar assistance to countries whose economies are in transition. WIPO’s approach is twofold: it is to identify and to promote international solutions to the legal and administrative problems posed by digital technology. in Central Asia.6 WIPO Intellectual Property Handbook: Policy. as well as those of the outside world. 1.19 The problem of development is compounded by rapid technological and scientific progress.and cost-effective manner. global network linking the intellectual property offices of all WIPO’s Member States. especially the Internet. traditional knowledge and folklore. 1. industrial and cultural levels. 1. for example. so that it is recognized as a part of everyday life not only by those directly involved in it at governmental. folklore. WIPO increasingly does not stop short of promoting all kinds of intellectual property. biological diversity. Central and Eastern Europe and the Baltic region.22 WIPO is increasingly adopting a global approach not only to intellectual property in itself. WIPO has been accredited by the Internet Corporation for Assigned Names and Numbers (ICANN) to administer cases filed under ICANN’s Uniform Domain Name Dispute Resolution Policy. but to the place of intellectual property in the wider framework of emerging issues such as traditional knowledge. but also by any others who compose civil society. individual creators or simply interested members of the general public. enabling parties to settle cases in a time. whereby WIPO assists developing countries in the implementation of WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) (see chapter 5).20 WIPO’s work in alternative dispute resolution between individuals and companies. whose creativity has yet to be adequately harnessed.21 A project that will greatly advance the sharing of valuable intellectual property information benefits is the worldwide global intellectual property information network (WIPONET). 1. facilitating access to and exchange of information worldwide. 1. Realizing the importance of small. the relation between intellectual property and genetic resources. WIPO has given particular attention to the 49 Least Developed Countries (LDCs). whether in non-governmental organizations or small businesses. public health personnel. in the establishment of sound institutions and administrative structures and in the training of appropriate personnel. These issues are explored in chapter 2 and chapter 7. 1. WIPO has followed the method of consultation and empirical research to find. environmental protection and human rights. Law and Use to streamline application procedures and to reduce the cost of obtaining simultaneous patent protection in several countries. WIPO’s role is to assist them also in the preparation and enforcement of laws. a project launched by WIPO in 1999. Already WIPO’s main and subsidiary websites are heavily used all over the world. . to receive the full benefits of the creations of their citizens.18 WIPO’s cooperation for development program is closely interwoven with governmental and intergovernmental cooperation. WIPONET is designed to establish a secure. This is only the means to achieve an end.

The main functions of the Conference were originally divided into five groups. governments have negotiated and adopted multilateral treaties in the various fields of intellectual property. whether or not they are members of any of the Unions.28 Why is an intergovernmental intellectual property organization needed? Intellectual property rights are limited territorially. with growing similarity in the approach and procedures governing intellectual property matters in various countries.). Proposals for the amendment of the Convention may be initiated by any State member of WIPO. and in that context it was empowered.25 The constitution. In describing WIPO. . like the General Assembly. The treaties fall into three groups. First.24 WIPO’s agenda of outreach to all members of society is through their inclusion as stakeholders and partners in global and national intellectual property systems. the Conference was to constitute a forum for exchanges of views between all States members of WIPO on matters relating to intellectual property. they exist and can be exercised only within the jurisdiction of the country or countries under whose laws they are granted. To ensure that such inclusion is of benefit to the parties concerned. etc. Secondly.” of WIPO is the Convention signed at Stockholm in 1967. 1. thirdly. taken from the place where the text of the treaty was first adopted (thus the Paris Union. experience and expertise that will enable them to use those systems effectively. as well as to follow certain common rules. and also to provide them with access to the knowledge. But works of the mind.Chapter 1 . Fourthly.27 Unlike the General Assembly. the Conference consists of all the States which are members of WIPO. the “basic instrument. the Conference. Fifthly. the Conference is also competent to adopt amendments to the Convention establishing WIPO. in most cases. the Conference was to establish the biennial development cooperation program for developing countries and. This means that WIPO’s activities aim to give to all levels of society an awareness of how they have a stake in a healthy intellectual property system. by the Coordination Committee or by the Director General. was to determine which States and organizations would be admitted to its meetings as observers. Structure 1. 1.Introduction 7 WIPO has established a program aimed at helping them to fulfill their potential as a powerful force behind wealth creation. Moreover. A Union consists of all the States that are party to a particular treaty. the Berne Union. including inventive ideas. each of which establishes a “Union” of countries which agree to grant to nationals of other countries of the Union the same protection as they grant to their own. 1. it makes eminent sense to simplify practice through international standardization and mutual recognition of rights and duties among nations. having regard to the competence and autonomy of the Unions.26 The General Assembly consists of all the States that are members of WIPO and also members of any of the Unions. to make any recommendations on such matters. Therefore.29 The Unions administered by WIPO are founded on the treaties. 1. the following questions will be answered in very general terms: why is an intergovernmental organization needed? What are the Unions administered by WIPO? Which States are members of WIPO? What does WIPO do? How is it governed and managed? 1. standards and practices. The name of the Union is. do and should cross frontiers with ease in a world of interdependent nations. WIPO pursues a policy of empowerment. it was to adopt a budget for that purpose. in particular.

six treaties on industrial property fall into this group.32 The third group consists of treaties which establish classification systems and procedures for improving them and keeping them up to date. the Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks and the Locarno Agreement Establishing an International Classification for Industrial Designs. 1. the staff in the professional and higher categories are recruited on a principle of equitable geographical distribution established in the United Nations system. 1. taking into consideration the practice of the United Nations. all dealing with industrial property. the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure and the Hague Agreement Concerning the International Deposit of Industrial Designs. 1. For instance. 1. three treaties on industrial property fall into this group—the Paris Convention. They are the International Patent Classification Agreement (IPC). they are treaties which are the source of legal protection agreed between countries at the international level. the General Assembly appoints the Director General upon nomination by the Coordination Committee. WIPO provides the framework and the services for this work. 1.36 The fourth organ of WIPO is the International Bureau of WIPO or Secretariat. fall into this group. which provides for the filing of international applications for patents. it determines the working languages of the Secretariat. the Lisbon Agreement. the Madrid Agreement Concerning the International Registration of Marks. Four treaties. the Conference.31 The second group consists of treaties which facilitate international protection. the Coordination Committee and the International Bureau of WIPO or Secretariat. and further consists of those who make up its regular staff. the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks. that is to say.35 The General Assembly is the supreme organ of WIPO. Among its other powers and functions.30 The first group of treaties establishes international protection. which has already been mentioned because it belongs to both the first and second groups. Administration 1. .34 The Convention establishing WIPO provides for four different organs: the General Assembly.8 WIPO Intellectual Property Handbook: Policy. For instance. it approves the measures proposed by the Director General concerning the administration of the international agreements designed to promote the protection of intellectual property.33 Revising these treaties and establishing new ones are tasks which require a constant effort of international cooperation and negotiation. the Madrid Agreement for the Repression of False and Deceptive Indications of Source on Goods and the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration. It is headed by the Director General. Law and Use 1. They are the Patent Cooperation Treaty. and it also determines which States not members of WIPO and which intergovernmental and international non-governmental organizations shall be admitted to its meetings as observers. and other staff are from a wide range of countries in all regions of the world. supported by a specialized secretariat. it adopts the financial regulations of WIPO and the biennial budget of expenses common to the Unions. it reviews and approves the reports and activities of the Coordination Committee as well as the reports of the Director General concerning WIPO.

42 A second such policy arises out of the work of the Working Group on Policies and Practices for the Nomination and Appointment of Directors General.Introduction 9 Membership 1. Acting upon the recommendations of the Working Group. at least the administrative provisions of the Stockholm (1967) Act of the Paris Convention or of the Paris (1971) Act of the Berne Convention.40 The Member States of WIPO have. which was established by the WIPO Coordination Committee in 1988.39 The States party to the Convention Establishing the World Intellectual Property Organization (WIPO) are listed in the appropriate document to be found inserted in the back flap of this volume. 1991 and 1993. adopted or considered a series of policies which ultimately require. and to any State which is not a member of any of the Unions. 1. and possibly subsequently the amendment of the relevant provisions of the WIPO Convention and the treaties administered by WIPO that provide for the payment of contributions by Contracting States. or concurrently ratify or accede to. the Assemblies of the Paris and Berne Unions and the WIPO Conference adopted a proposal to amend Article 9(3) of the Convention Establishing the World Intellectual Property Organization. pending the amendment of the requisite treaties to bring the provisions of those treaties into line with the new classes. 1. 1. 1. the same organs also adopted new contribution classes on the same provisional basis. for their implementation. Constitutional Reform 1. Thus only States can be members of WIPO. In 1993 the WIPO Conference and the Assemblies of the Paris and Berne Unions adopted the unitary contribution system in replacement of the multiple contribution system provided for in the WIPO Convention and the treaties administered by WIPO.37 The Convention establishing WIPO declares that membership shall be open to any State that is a member of any of the Unions. 1. Under the unitary contribution system a State party to any of WIPO’s contribution treaties would pay a single contribution. the WIPO Coordination Committee and the WIPO General Assembly. amendment of the WIPO Convention and at least certain of the other treaties administered by WIPO. provided that it is a member of the United Nations. in recent years. The proposals for simplification and rationalization relate to . In 1989. a State must deposit an instrument of ratification or accession with the Director General of WIPO at Geneva. It was adopted on a provisional and experimental basis. pending an evaluation of the outcome. of any of the specialized agencies of the United Nations or of the International Atomic Energy Agency. regardless of the number of such treaties to which it was party. or is party to the Statute of the International Court of Justice or is invited by the General Assembly of WIPO to become a member.41 The first such policy relates to the unitary contribution system and changes in contribution classes.43 The third series of policies arises out of the adoption of the 1998-99 Program and Budget. limiting to 12 years a Director General’s total period in office.38 To become a member. States party to the Paris or Berne Conventions may become members of WIPO only if they are already bound by. That Program and Budget contained various proposals for the simplification and rationalization of the governance structure of WIPO.Chapter 1 .

and adopted by.48 The reasons for the establishment of the Executive Committees of the Paris. WIPO Conference 1. The Working Group met on six occasions in the space of three years. there are. which was open to all Member States of WIPO and also to the Member States of the Paris and Berne Unions. the Assemblies of Member States of WIPO in September 2002. 2001 and 2002 respectively.45 The culmination of proposals by the Secretariat and the adoption by the Member States of the policies described above was the creation of a Working Group on Constitutional Reform. a substantive item of business. or were of lesser importance and did not require attention by the Assembly. Berne and PCT Unions. In reality the functional division of work originally envisaged between the General Assembly and the Conference did not occur.49 In practice. other similar proposals in respect of organs or bodies constituted by WIPO-administered treaties.52 The third set of proposals on constitutional reform is to amend the WIPO Convention in order to abolish the WIPO Conference. 1. In practice. Its final recommendations were submitted to. and the only ostensible difference in the proceedings is the difference in presiding officer. the Conference has considered very few separate items of business. 1. 1. The Working Group. and therefore could not await the next ordinary session of the Assembly. the Executive Committees have never functioned as intended. twice in 2000. the Conference never meets separately from the General Assembly. In practice also. the WIPO Secretariat used the opportunity to propose other options for change in the governance structure of WIPO. the Berne Union and the PCT Union 1.46 The various proposals on constitutional reform which were studied by the Working Group may be described under five topics: Unitary contribution system and changes in contribution classes 1.51 The WIPO Conference is composed of all the Member States of WIPO. the Paris Convention. The PCT Executive Committee was never actually constituted. the Berne Convention and the PCT by abolishing the Executive Committees of the Paris. It meets during the same period and in the same room as the General Assembly. 1. Executive Committees of the Paris Union. was established by the WIPO General Assembly at its meeting in September 1999. however.44 Given that it appeared necessary to set in motion the procedure for treaty amendment because of the new practices relating to the unitary contribution system and contribution classes and the policy on limitation of mandates of Directors General.10 WIPO Intellectual Property Handbook: Policy.50 The second set of proposals on constitutional reform is therefore to amend the WIPO Convention. and neither the Paris nor the Berne Executive Committee has ever considered. . Berne and PCT Unions seem to have been the perceived need for a body of a lesser number of member States than the Assembly in order to consider matters that were urgent in nature.47 The first set of proposals on constitutional reform is to amend the relevant WIPOadministered treaties in order to formalize the unitary contribution system adopted in 1993 and the new contribution classes adopted in 1989. 1. Law and Use committees constituted directly by the Assemblies of the Member States. as a body meeting separately. 1. 1991 and 1993.

and the Lisbon Union Council. 1. 1.56 Under this proposal. The following Conferences of Representatives still exist: Paris Union Conference of Representatives. The Assembly of member States of a Union was introduced as a result of the reforms at the 1967 Stockholm Diplomatic Conference. the formalization in the treaties of what was already in practice. Unitary Assembly 1.Chapter 1 . Final Recommendations of the Working Group adopted by the Assemblies in 2002 1. one Assembly of Member States.53 The Conferences of Representatives that exist for various Unions were the predecessor bodies of the Assemblies of those Unions. the bodies have never separately considered any item of substantive business. Nice Union Conference of Representatives. There would continue to be a number of different treaties.55 The fourth set of proposals on constitutional reform is to amend the relevant conventions and other documents in order to discontinue the Conferences of Representatives. with differing memberships. (ii) which have member States that have not yet acceded to or ratified the Stockholm (1967) Act of the Treaty. the WIPO General Assembly would be the body competent to make decisions in respect of all WIPO treaties. in the Stockholm Act of those treaties that were revised at that Diplomatic Conference. Their convening has tended to be a formality only. These recommendations were: (i) the abolition of the WIPO Conference. Conferences of Representatives thus exist only for those Unions: (i) and which were established under treaties that have Acts that were concluded before 1967. 1. providing for rights and obligations in the field of intellectual property. from once every two years to once every year. Moreover. however. Each Assembly constituted by a WIPO treaty would be replaced by the WIPO General Assembly so that there would be one organization.57 The fifth set of proposals on constitutional reform is to amend the relevant treaties and conventions in order to reduce the number of WIPO governing bodies to one single Assembly.Introduction 11 The other Conferences of Representatives 1. In practice.54 The powers conferred on the Conferences of Representatives by their constituent instruments were extremely limited. all be administered in accordance with the unitary structure. They would. and declining as States progressively accede to the Stockholm Acts of the relevant treaties. (ii) in respect of the unitary contribution system and the changes in contribution classes.58 The final three recommendations on which agreement was reached by the members of the Working Group on Constitutional Reform were submitted to the General Assembly in September 2002. one Secretariat and one contribution from Member States. Berne Union Conference of Representatives. . Hague Union Conference of Representatives. and (iii) a change in the periodicity of the ordinary sessions of the WIPO General Assembly and the other Assemblies of the Unions. the number of States belonging to those bodies is small.

members include President Guido de Marco (Malta). 1. who would draw on its conclusions in formulating possible policy proposals for the Member States’ consideration. It was published under a new Policy Advisory Commission imprint in December 1999.12 WIPO Intellectual Property Handbook: Policy. 1. transfer of technology to developing countries. and a policy of public outreach has been pursued. It was to present its findings to the Director General. and worked on the above-mentioned projects as well as considering other questions. the Director General of WIPO proposed to Member States the establishment of a Commission of eminent international personalities drawn from politics. protection of indigenous cultures and the viability of an “international patent” ensuring the continuing and widespread availability of pharmaceuticals. For this purpose. and President Jorge Sampaio (Portugal). 1. 1. The proposed amendments were considered and adopted by the WIPO General Assembly and the other concerned Assemblies of the Unions in September 2003. in Amman in July 1999 and Washington. WIPO has increasingly sought to build up the broadest possible base throughout the world. and looked in detail at the Japanese experience of intellectual property and wealth creation. The Policy Advisory Commission (PAC) was to consider vital topics such as the advance of globalization. The said amendments will enter into force one month after written notifications of acceptance have been received by the Director General from three-fourths of the Member States. electronic commerce. D. informed and effective manner to international and regional developments in intellectual property. Law and Use 1. diplomacy and administration.60 The Member States of WIPO have now been invited to accept the amendments in accordance with their respective constitutional processes.63 Member States approved this proposal. to “enhance the Secretariat’s capacity to monitor and respond in a timely. The Policy Advisory Commission 1. . breakthrough discoveries in biotechnology.C. digital technology. conservation of biodiversity and the environment. Hisamitsu Arai. It then resolved to set up a Task Force to develop its work program: this was to include the formulation of a World Intellectual Property Declaration (WIPD) stating clearly and simply to the general public the benefits of intellectual property and intellectual property rights.62 In March 1998.65 The Task Force met twice. and the relation of those topics to the intellectual property system. which held detailed discussions on both globalization and the need to demystify and depoliticize intellectual property issues. several advisory bodies have been established. and set out a timetable for the process of amendment of several WIPO-administered treaties for implementation of the suggested recommendations. in March 2000.64 The first meeting of the Commission took place in April 1999.59 The Assemblies of the Member States of WIPO adopted the three recommendations of the Working Group on Constitutional Reform in September 2002. in information technology and in other fields bearing on WIPO’s operations and its policy environment. Work on the World Intellectual Property Declaration (WIPD) led to its adoption by the PAC at its second meeting in June 2000.” More recently (November 2003). HRH Prince El-Hassan of Jordan was elected Chair of the 25-member body. The first study to be published under the auspices of the PAC was authored by a member.61 Apart from using the mechanisms described above. Wider Consultation and Outreach 1. President Ion Iliescu (Romania)..

1. the challenges that industry faces from globalization and rapid developments in technology directly affect and are affected by intellectual property.73 Since its establishment.69 The Industry Advisory Commission (IAC) was established in 1998 as part of the efforts by WIPO’s Director General to take into consideration the broadest range of opinions in the context of policy-making. 1.67 The third meeting of the PAC took place in Geneva in October 2001. and the IAC does not in any way replace the decision-making powers of WIPO’s Member States.71 The IAC. Protection and Exploitation of Intellectual Property.72 Being a purely advisory body for the Director General of WIPO. The topics discussed. with a discussion paper. the information-technology-based WIPONET project and its potential benefits for developing countries. biotechnology and the impact of the global economy on the intellectual property system. The Industry Advisory Commission 1. developments in automation of the Patent Cooperation Treaty and the results of the recent Diplomatic Conference for the Adoption of the Patent Law Treaty. including electronic commerce. 1. is of crucial importance to WIPO in view of the fact that industry benefits most directly from intellectual property protection. 1. The topics discussed were Managing Cultural Assets.68 A fourth plenary meeting took place in November 2003. This followed a preparatory Task Force meeting in Beijing in May 2002. 1. 1. entitled Copyright. WIPO’s approach to global communications. with a discussion paper. the IAC has held discussions on a broad range of issues. were the Agenda for Development of the International Patent System and Issues Concerning Intellectual Property and Genetic Resources. Traditional Knowledge and Folklore. These representatives were invited in their personal capacity. Hisamitsu Arai. The Commission is composed of some 20 top-level representatives from the private sector.Chapter 1 . intellectual property and wealth creation. following a preparatory meeting of the Task Force in New York in May of that year. provided by Mr. pharmaceuticals and biotechnology. Bruce Lehman. must stay abreast of developments in the private sector. The IAC thus provides a forum for leaders in industry to exchange views with WIPO. whose mission is to promote the protection of intellectual property worldwide.66 Besides working on the WIPD. which generally meets twice a year. the IAC’s recommendations are not binding. as well as efforts by WIPO to promote public awareness and understanding of intellectual property and its contribution to economic and social development. entitled Strategic Program for the Creation. informed and effective manner to the demands of the market sector and of users of intellectual property systems.Introduction 13 1. telecommunications.70 The idea of the IAC arose from the Director General’s conviction that an organization like WIPO. music). Among the industries represented are those connected with entertainment (motion pictures. . Culture and Development: the Role of Intellectual Property and of WIPO in the Cultural Industries. The IAC will also enhance the WIPO Secretariat’s capacity to monitor and respond in a timely. accompanied by presentations. with consideration being given to balanced geographical distribution and the need to have as broad a range of industries as possible represented. the second meeting of the PAC also heard and discussed presentations on the WIPO Worldwide Academy. provided by Mr. In addition. theatre. and Intellectual Property Policies and the Japanese Economy.

especially through the provision of expert advice. Russian and Spanish. 1. mostly students. Thousands of pages of information. articles in the press and media coverage on radio and television worldwide gave WIPO and its activities greater exposure amongst the public. the Ad Hoc Advisory Panel on Privatization. English. inventions used in everyday life in the home and music in the digital age) held at WIPO and elsewhere. and an increasing number of free publications are available for downloading from the WIPO website. and new material was added. 1.74 Bearing in mind the importance of the issue of privatization in an increasing number of countries. 1. are also organized regularly throughout the year. WIPO and Public Outreach 1. 1. in order to demystify a hitherto specialized field for a wider public. in 2000.81 WIPO also worked with certain Member States and organizations (notably in the framework of cooperation for development) in the field of public outreach. are available via the site in six languages.75 The Panel met twice in 2000. diplomatic and academic circles. French. .5 million pages per month during 2003. the Director General of WIPO created a new body. The aim is to promote a general understanding of the role of intellectual property and of the need to foster and protect it. to assist Member States in determining strong intellectual property policies and strategies for their efforts at privatization. WIPO has concentrated these efforts on using three types of means – information technology. more traditional information materials and “live” activities promoting media and personal contact and interchange. with the object of raising awareness in the general public of the nature and importance of intellectual property. Sales of information products were enhanced by the creation of a new Visitors’ Center in 1998 and of an electronic bookshop in 1999. Chinese. Law and Use The Ad Hoc Advisory Panel on Privatization 1. pamphlets. It is a panel of nine experts representing governmental. also in the form of posters and CD-ROMs. 1. structure and activities of the Organization. training and guidelines for evaluating intellectual property assets in the privatization process. WIPO press releases. Specialized thematic briefings are also organized on request for groups who are interested in more in-depth information about specific intellectual property issues. The groups are briefed on the history. brochures.78 The more traditional printed information materials—books. Many publications are made available on CD-ROM to Member States for translation and local printing.77 The major tool used in information technology to reach a wider public is the Internet.79 Media activities and exhibitions on aspects of intellectual property extended public outreach. as did exhibitions on various aspects of intellectual property (such as women inventors. Arabic. 1. and in particular considered how identification and appropriate valuation of intellectual property assets could be incorporated into the privatization process. including the documentation of most WIPO meetings and many of its printed publications. 80 Visits for groups.14 WIPO Intellectual Property Handbook: Policy. The WIPO website was developed to the extent that visitors viewed an average of 4. leaflets— increased.76 Since 1998 WIPO has made a concerted effort to reach out not only to the intellectual property community but also to the general public.

Chapter 2 Fields of Intellectual Property Protection Patents Introduction Conditions of Patentability Drafting and Filing a Patent Application Examination of a Patent Application Infringement Exploitation of the Patented Invention Compulsory Licenses Utility Models Copyright and Related Rights Introduction Copyright Protection Subject Matter of Copyright Protection Rights Comprised in Copyright Related Rights Ownership of Copyright Limitations on Copyright Protection Piracy and Infringement Remedies Intellectual Property and Traditional Cultural Expressions Trademarks Introduction Definitions Signs Which May Serve as Trademarks Criteria of Protectability Protection of Trademark Rights Use Requirements Trademark Registration Removal of the Trademark from the Register Rights Arising from Trademark Registration Trademark Piracy. Counterfeiting and Imitation of Labels and Packaging Change of Ownership .

Trademark Licensing Trade Names Franchising Character Merchandising Industrial Designs and Integrated Circuits Industrial Designs Integrated Circuits Geographical Indications Introduction Protection of Geographical Indications on the National Level Protection of Geographical Indications on the International Level through Multilateral Treaties Protection of Geographical Indications on the International Level through the Provisions of Bilateral Agreements Protection Against Unfair Competition Introduction The Need for Protection The Legal Basis for Protection The Acts of Unfair Competition .

sold.” The requirements are somewhat less strict than for patents. issued. he is given a statutory right to prevent others from commercially exploiting his invention. it must exhibit a sufficient “inventive step” (be non-obvious). These include. and the disclosure of the invention in the patent application must meet certain standards. The effects of the grant of a patent are that the patented invention may not be exploited in the country by persons other than the owner of the patent unless the owner agrees to such exploitation. that while the State may grant patent rights. it must be new (novel). usually under civil law. that the invention must consist of patentable subject matter. most significantly.6 An invention must meet several criteria if it is to be eligible for patent protection.” 2. Thus.1 A patent is a document. a patent is the right granted by the State to an inventor to exclude others from commercially exploiting the invention for a limited period. Conditions of Patentability 2. using or selling the invention. which is frequently referred to as a right to exclude others from making. The right to take action against any person exploiting the patented invention in the country without his agreement constitutes the patent owner’s most important right. imported) with the authorization of the owner of the patent.2 In a number of countries.Fields of Intellectual Property Protection 17 Patents Introduction 2. in return for the disclosure of the invention.3 Patents are frequently referred to as “monopolies”. for any infringement of his patent rights. upon application. and in comparison with patents the fees are lower. but a patent does not give the right to the inventor or the owner of a patented invention to make. 2. the invention must be industrially applicable (useful). 2. however. used. and the duration of protection is shorter. by a government office (or a regional office acting for several countries). 2. but otherwise the rights under the utility model or short-term patent are similar. An invention may relate to a product or a process. The disclosure of the invention is thus an important consideration in any patent granting procedure. since it permits him to derive the material benefits to which he is entitled as a reward for his intellectual effort and work. which describes an invention and creates a legal situation in which the patented invention can normally only be exploited (manufactured. .Chapter 2 . and compensation for the expenses which his research and experimentation leading to the invention have entailed.4 It should be emphasized. so that others may gain the benefit of the invention.5 Simply put. while the owner is not given a statutory right to practice his invention. in particular in respect of inventive step. The protection conferred by the patent is limited in time (generally 20 years). and it is up to the owner of a patent to bring an action. inventions are also protectable through registration under the name of “utility model” or “short-term patent. use or sell anything. it does not automatically enforce them. The patentee must therefore be his own “policeman. “Invention” means a solution to a specific problem in the field of technology.

respectively. and the “industrial” applicability of an invention means the application (making use) of an invention by technical means on a certain scale.11 “Applicability” and “industrial applicability” are expressions reflecting. 2. 2. 2. the general rule being that patent protection shall be available for inventions in all fields of technology (see Article 27. plants and animals other than microorganisms. If the invention is intended to be a product or part of a product. it should be possible to carry that process out or “use” it (the general term) in practice. Law and Use Patentable Subject Matter 2. in order to be patentable.12 The term “industrial” should be considered in its broadest sense.9 The TRIPS Agreement (Article 27. some countries do not require industrial applicability. the requirement of industrial applicability is met as long as the claimed invention can be made in industry without taking into account the use of the invention.8 Subject matter which may be excluded from patentability includes the following (see also Article 27. At one end of the spectrum. Examples of fields of technology which may be excluded from the scope of patentable subject matter includes the following: discoveries of materials or substances already existing in nature. such as those for doing business. On the other hand. Industrial Applicability (Utility) 2. Patentable subject matter is established by statute. an “industrial” activity means a technical activity on a certain scale. it should be possible to make that product. performing purely mental acts or playing games. rules or methods. including any kind of industry. an invention must fall within the scope of patentable subject matter. and essentially biological processes for the production of plants and animals. . must be of a kind which can be applied for practical purposes. In common language. the possibility of making and manufacturing in practice. schemes. or diagnostic methods practiced on humans or animals (but not products for use in such methods). but utility. And if the invention is intended to be a process or part of a process. the “usefulness” of the claimed invention is taken into account for the determination of the industrial applicability. and that of carrying out or using in practice. 2.18 WIPO Intellectual Property Handbook: Policy. not be purely theoretical.10 An invention. scientific theories or mathematical methods.3 of the TRIPS Agreement). methods of treatment for humans or animals.7 In order to be eligible for patent protection. and is usually defined in terms of the exceptions to patentability. National and regional laws and practices concerning the industrial applicability requirement vary significantly. other than non-biological and microbiological processes. At the other end of the spectrum.1 of the TRIPS Agreement).2) further specifies that Members may exclude from patent protection certain kinds of inventions. for instance inventions the commercial exploitation of which would contravene public order or morality.

unrecorded television broadcasts and actual public use. 2.21 A document will only destroy the novelty of any invention claimed if the subject matter is explicitly contained in the document. namely: by a description of the invention in a published writing or publication in other form. only its absence can be proved. demonstration. sale. This would exclude knowledge from other countries. by a description of the invention in spoken words uttered in public. made available to the public in any manner such as by offering for sale or deposit in a public collection. 2. and where such publications or disclosures occurred.17 The disclosure of an invention so that it becomes part of the prior art may take place in three ways.Chapter 2 . . or printed matter). writings (whether they be manuscript. and recording. Lack of novelty can only be found if the publication by itself contains all the characteristics of that claim.15 One viewpoint is that the determination of prior art should be made against a background of what is known only in the protecting country. that is. The subject matter set forth in a claim of an application under examination is thus compared element by element with the contents of each individual publication.Fields of Intellectual Property Protection 19 Novelty 2. Publications include issued patents or published patent applications. if it anticipates the subject matter of the claim. typescript. that is to say. or by putting the public in a position that enables any member of the public to use it.19 Oral disclosure. drawings or films. such a disclosure being called an oral disclosure. and that document must have been published. a document in the broad sense of the term. visual disclosure such as by display.18 Publication in tangible form requires that there be some physical carrier for the information.16 Another viewpoint is based on the differentiation between printed publications and other disclosures such as oral disclosures and prior use. all the knowledge that existed prior to the relevant filing or priority date of a patent application. if it was not imported into the country before the making of the invention. It must be emphasized.” 2. such a disclosure being a “disclosure by use. as the expression suggests. publication on the Internet must increasingly be taken into consideration. 2. in general. Today. implies that the words or form of the disclosure are not necessarily recorded as such and includes lectures and radio broadcasts. pictures including photographs.14 An invention is new if it is not anticipated by the prior art.13 Novelty is a fundamental requirement in any examination as to substance and is an undisputed condition of patentability. 2. by the use of the invention in public. “Prior art” is. 2. however. 2. even if that knowledge was available abroad before the date of the making of the invention. that novelty is not something which can be proved or established. 2. whether they be discs or tapes in either spoken or coded language. whether it existed by way of written or oral disclosure. The question of what should constitute “prior art” at a given time is one which has been the subject of some debate.20 Disclosure by use is essentially a public.

that is. 2. There must be a clearly identifiable difference between the state of the art and the claimed invention.” 2.28 Secondly.29 In order to assess the nature of the differences which are relied upon as constituting an inventive step. It is intended that the person be limited to one having the average level of skill reached in the field in the country concerned. that is. and it must be a step. different from what exists in the state of the art. that is.24 In relation to the requirement of inventive step (also referred to as “non-obviousness”). except where there is no technical link between them. account has to be taken of the prior art as a whole.27 It should be noted that novelty and inventive step are different criteria. whereas the claim may define a set of subject matter known separately. be implicit in the publication in the sense that. 2. but with the combinations thereof. it must be noticeable. the question as to whether or not the invention “would have been obvious to a person having ordinary skill in the art” is perhaps the most difficult of the standards to determine in the examination as to substance.25 The inclusion of a requirement like this in patent legislation is based on the premise that protection should not be given to what is already known as part of the prior art. . it is required that this advance or progress be significant and essential to the invention. Law and Use 2. it is necessary that not only the combination. but that this difference must have two characteristics. The combination may be global. 2. Thus. and not each of the new elements taken individually. “is there inventive step?” only arises if there is novelty. lack of novelty of this kind will only be raised by the Patent Office where there is no reasonable doubt as to the practical effect of the prior “teaching. insofar as each such combination is obvious to the person having ordinary skill in the art. The expression “inventive step” conveys the idea that it is not enough that the claimed invention is new. For the inventive step to be denied. Novelty exists if there is any difference between the invention and the prior art. The question.26 The expression “ordinary skill” is intended to exclude the “best” expert that can be found. it is not permissible to combine separate items of prior art together. Generally speaking. 2.20 WIPO Intellectual Property Handbook: Policy. Inventive Step (Non-Obviousness) 2. namely: the problem to be solved. it is useful to assess inventive step in relation to three aspects. the subject matter of the claim under examination is compared not with each publication or other disclosure separately. Firstly.30 In most cases. but also the choice of the combined elements. in some jurisdictions. It is the sum of the differences that have been discovered which must be compared with the prior art and judged as to obviousness. the result of a creative idea. for instance a new form of washing machine including a particular type of motor coupled to a particular type of pump. in carrying out the “teaching” of the publication. is obvious. it must be “inventive”. 2.23 It should be noted that in considering novelty. as distinct from the assessment of novelty. a person having ordinary skill in the art would inevitably arrive at a result falling within the terms of the claim. there is the concept of an “advance” or “progress” over the prior art. This is why. 2.22 Lack of novelty may however. or to anything that the person with ordinary skill could deduce as an obvious consequence thereof.

Fields of Intellectual Property Protection 21 - the solution to that problem. it should be possible for an opposition to be based on non-compliance with any substantive requirement. the examination will bear on the originality of the solution claimed. 2. solve it in the manner claimed. unless opposition is filed within a prescribed period. the public must be informed of the content of the application. If no inventive step is found in the solution. or a patent has been granted on the application.33 The application must disclose the invention in a manner sufficiently clear for the invention to be carried out by a person skilled in the art. An opposition procedure is designed to allow third parties to present objections to the grant of a patent.32 An additional requirement of patentability is whether or not the invention is sufficiently disclosed in the application. 2.34 The description should set out at least one mode for carrying out the invention claimed. In some countries. insufficient disclosure of the invention. 2. 2. some jurisdictions provide for an opposition procedure which may be instituted either before or after the grant of a patent. and this is done by the Patent Office by publication of a notice in an official journal or gazette to the effect that: the application is open to public inspection. and the advantageous effects. and/or the Patent Office will. This should be done in terms of examples. Disclosure of the Invention 2. Some jurisdictions make it possible to file an opposition on the ground that the applicant has no right to a patent.37 The grounds upon which an opposition may be filed are prescribed by the relevant legislation. grant a patent. the law in some countries restricts an opposition to certain substantive requirements only. 2. Generally speaking. and with reference to the drawings.31 If the problem is known or obvious. if any. inventive step or industrial applicability.35 Whether or not there is an examination as to substance. 2. where appropriate. Typically these grounds are lack of novelty.Chapter 2 . and foresee the result. of the invention with reference to the background art. the question becomes whether or not the result is obvious or whether it is surprising either by its nature or by its extent. If a person having ordinary skill in the art would have been able to pose the problem. the description is required to disclose the best mode for carrying out the invention known to the applicant. or the fact that an amendment made to a patent application has gone beyond the original disclosure in the application as filed. if any. .36 So that oppositions may be filed. However. the inventive step is lacking.

43 Secondly.41 Drafting practices and requirements differ from country to country.39 It is during this process that a full comprehension of the essence of the invention is obtained.38 The first task in drafting a patent application is the identification of the invention. there are typically three basic requirements to be complied with in the drafting of a patent application. 2. Second. having identified the critical features and their effect. fulfill the requirements for patentability. and to be carried out by a person having ordinary skill in the art.40 Often the invention contains more than one new feature. and this is important in helping to draft the description and claims. can the specific features be substituted or altered while still achieving the end result. This is of fundamental importance. It is from the claims that third parties are able to know what they may do and what they may not do. There are two important reasons for this. This involves: summarizing all the necessary features which in combination solve a particular technical problem. It is essential to identify the critical feature or features and to have an explanation of why they contribute to an effective solution to the problem. referred to as “unity of invention”. This third basic requirement is important since the claims are the basis of interpretation of patent protection. 2. the claims should be as broad as possible. However. since one of the main functions of the description is to provide new technical information to third parties.44 Thirdly.42 Firstly. and an examination of this combination to determine whether it would. This is important not only in drafting the claims. is particularly important when claims are being drafted. or to a group of inventions so linked as to form a single general inventive concept. it must contain claims which determine the scope of the protection. according to one’s own judgment. which must be wide enough to cover these substitutes or alternatives. An important phrase to note in this requirement is “a person having ordinary skill in the art. First.22 WIPO Intellectual Property Handbook: Policy. the description should disclose the invention in a manner sufficiently clear and complete for the invention to be evaluated. for the application to proceed. that is. This requirement. Practical Aspects of Drafting Patent Applications 2. The claims may not be significantly broader or different from that which has been described.” This allows for a simplified description since it can be assumed that the reader will be an informed reader having the background knowledge which makes it unnecessary to describe every basic detail of the invention. but also in the description of the invention which must include details of the substitutes or alternatives so that the broad claim can be supported by the description. there is a requirement that the application should relate to one invention only. 2. it is then necessary to ask how else may this effect be achieved. The claims must be clear and concise and fully supported by the description. especially inventive step. Law and Use Drafting and Filing a Patent Application Identification of the Invention 2. 2. 2. the broadest claim is the one restricted by the least number of features. .

Therefore it is the most important task in the work of the patent agent when preparing the application.Fields of Intellectual Property Protection 23 2. Elements of the drawings which are described are numbered in the drawings and these numbers utilized in the description of the embodiment. Similarly. This section may also describe the object of the invention. may be made when single descriptive words can be used where they do not interfere with the lines of the drawings. standard components may be indicated in the drawings by boxes which may be labeled. 2. Normally the drawings should contain no textual matter.47 The third section of the description provides a summary of the invention in such terms that it may be readily understood. and a detailed description of one or more embodiments of the invention. the drawing may be the chemical formula of one or more compounds. the drawing may be a diagram such as a phase diagram of the components. If the invention relates to some form of mechanical object.52 The claims are the center or the heart of any granted patent because they define the protection which is the purpose of the patent. they define clearly the scope of the exclusive right provided by the patent. 2. namely. drawings illustrating plan. If the device. what the invention sets out to achieve.48 In the fourth section of the description. Where the invention is of a metallurgical nature. and blocks or boxes contained therein may be labeled as appropriate. that is to say. The patent agent will normally describe the invention first in general terms which correspond to those he intends to use in the main claim. the patent agent usually sets out any existing problems or difficulties which the invention overcomes. two elements are generally found. is a machine or an electrical circuit.51 It is usual for the description of the embodiment to include a passage which briefly describes the actual operation of the invention. This description of the invention in general terms is usually followed by a series of paragraphs which set out different preferred features of the invention. for example. the background of the invention is described. the agent can avoid any disputes that might arise based on differences between the invention described and the invention as defined in the claims.49 Where the invention is an electrical circuit. By using this technique.45 The first section of the description typically contains two elements. namely a brief description of the drawings. if drawings are appropriate. that is to say. however. These paragraphs usually form the basis for dependent claims which follow the broad main claim.50 Where the invention is in the chemical field. elevation and sectional views of that object could be used. drawings can be used effectively to show the connections between the various elements or components of the circuit. drawings may show a block. for example.Chapter 2 . In drafting this section. Exceptions. The second section of the description is important to provide a good understanding of the invention and to put it into perspective against the prior art... Thus in any drawing illustrating an electrical circuit. the manner in which the machine or electrical circuit operates is extremely helpful in understanding the invention. 2. 2. Any previous solutions to those problems or difficulties should be described. schematic or flow-sheet diagram.. Again these elements or components should be numbered for ease of reference. 2. Usually this statement is in the form of a short introductory paragraph which commences with the phrase “This invention relates to . where the invention relates to a process.” 2.. preferably in a way which clearly sets out the difference between the present and previous solutions. the title of the invention and a brief statement of the technical field in which the invention lies. to produce a wording of the claims which defines the . for example.46 In the second section. 2..

2. namely: examination as to form.56 The guiding principle is that the abstract should be so drafted that it can efficiently serve as a scanning tool for purposes of searching in the particular art.54 The narrower claims following the broad main claim usually refer back to one or more of the preceding claims. such as the term of . They are therefore usually called dependent claims. 2. It serves the purpose of enabling third parties to obtain quick information about the essential contents of the invention. 2. and hopefully this results in stronger claims which could withstand any anticipation by more relevant prior art which might be produced by a Patent Office during examination. the normal procedure is for a dialogue to be carried out. between an examiner in the Patent Office. 2. the application will be treated as if it had not been filed.53 The series of claims drafted by the patent agent generally commences with a broad main claim followed by a number of claims of narrower scope. The Filing Date and Priority Date 2. This is a fundamental check since if a filing date is not established. and examination as to substance.58 In each of these areas of activity. It should be emphasized that there must be some element of additional invention in each succeeding claim in order for it to be stronger.59 Prior to examination as to form. The features introduced in each of the dependent claims must find some basis in the description. or by third parties during any opposition or invalidation proceeding. 2. It must be emphasized that it is not used to interpret the scope of protection. and it proceeds no further. Generally speaking. The patent agent acts as a go-between in the sense that he receives communications from the Patent Office. and the applicant. advises the applicant as to the appropriate course of action.24 WIPO Intellectual Property Handbook: Policy. it contains between 50 and 150 words. The broad claim is drafted so as to just avoid the prior art known at the time of preparing the application. the application is checked to ensure that all the requirements necessary to accord the application a filing date. There it is usually explained that these are preferred features which produce a better technical form of the invention. 2. Law and Use invention in terms of the technical features disclosed in the description and which does not contain any reference to commercial advantages.55 The last element of a patent is the abstract. The patent agent drafts the succeeding claims more narrowly. search.57 It is now useful to follow the progress of an application through the Patent Office. takes the applicant’s instructions. have been satisfied. There are three main areas of activity worthy of some comment. Examination of a Patent Application Examination as to Form. Thus the abstract has to be as concise as the disclosure permits. The filing date is important in the general scheme of things since it constitutes the date from which certain actions are calculated. The abstract presents a short summary of the description and the claims. mainly in writing. and responds accordingly to the Patent Office’s communications.

These patent documents may be supplemented by articles from technical journals and other so-called non-patent documents. 2. which disclose subject matter the same as or closely resembling the invention.63 Examination as to form is normally carried out as soon as an application has been accorded a filing date. since he has up to twelve months to decide in which foreign countries he desires protection. Search 2. Basically this covers the following points: the representation by a patent attorney. if any. In either case. determines the priority date of any subsequent application in another country under the terms of the Paris Convention for the Protection of Industrial Property. the examination as to substance. the type of documents that may have been searched. that under some national laws. and the claims in the application that should be compared with each of those documents. or at the same time as. In conducting the search the Patent Office checks its documentation collection to ascertain whether any documents exist which describe a solution which is the same as or similar to that described in the application. This total collection of documents is usually referred to as “the search file. and the inclusion of an abstract. the physical requirements governing the description. that is. the contents of the request. It should be noted however. the statement concerning the inventor.64 Depending on the examination procedure provided in the relevant law. 2. 2. Its effect is to substitute the date of the earlier filing for the date of the national filing and this is particularly important with respect to the relevant prior art for evaluating novelty and inventive step.61 The right of priority is available in all countries which are party to the Paris Convention or the TRIPS Agreement. regional or international application filed less than twelve months earlier.65 If the search is conducted separately from the examination as to substance. the steps to be taken to secure protection in the various countries of interest to him.62 The right of priority offers great practical advantages to an applicant who seeks protection in one or more other countries. 2. the search will be conducted either separately from and prior to. and. the objective of the search is to determine the prior art in the specific field to which the invention relates. 2.” .Fields of Intellectual Property Protection 25 the patent.Chapter 2 . the time span covered and the specific areas of technology searched. The applicant can use that period to organize. with due care.67 The search itself is a documentary search in a collection of patent documents that is primarily arranged for search purposes according to the specific areas of technology. the Patent Office rejects the application. priority rights are granted on a bilateral basis of reciprocity for countries not parties to the Paris Convention. The applicant is given an opportunity to correct any defects identified during examination as to form.60 The right of priority may be based on a national. and if such defects are not corrected within a specified time. the claims and the drawings. 2. The filing date (or priority date) is also relevant to the evaluation of novelty and inventive step. a search report will be forwarded to the applicant setting out: a list of the documents located during the search. 2. The applicant is not required to present all applications in his own country and in foreign countries at the same time.66 The report may also give an indication of the scope of the search. where appropriate.

75 If and when the examination process has reached a conclusion favorable to the applicant. does not involve an inventive step and/or is not industrially applicable. 2. and assuming no opposition has been filed or that any opposition has been unsuccessful.74 It should be noted that since the purpose of any patent law is to protect inventions. Grant and Publication 2. It may additionally carry out an online computer search of one or more commercial databases. if any.71 In the same way as with examination as to form. any doubt is resolved in the applicant’s favor. but also amendments to clarify the disclosure will result in a better description of the invention and a more precise definition of the scope of protection. or the invention is not sufficiently disclosed in a clear and complete manner in the documents filed. will only be taken into account during the examination as to substance if that use has been brought to the attention of the Patent Office by some third party’s action. 2. In essence. It must be realized that whilst completeness is the ideal of the search. Not only can deficiencies be eliminated and thus a better patent grant secured. the Patent Office will only refuse to grant a patent if the results of the examination clearly preclude the grant. taking into account the outcome of the search in the directly relevant areas of technology.68 The Patent Office may conduct the search only in respect of documents in the search file. that is to say all the necessary requirements as to form and substance have been fulfilled. and may then have to be extended to analogous fields.70 The aim of the examination as to substance procedure is to ensure that the application satisfies certain conditions of patentability. this ideal may not necessarily be obtained because of such factors as the inevitable imperfections of any classification and information retrieval system.73 Not all amendments are permissible. but the need for such extension must be judged by the examiner in each individual case. The search does not extend to disclosures other than publications and. 2.26 WIPO Intellectual Property Handbook: Policy. the Patent Office will refuse the grant of a patent. this is to prevent the grant of a patent where: the invention is excluded from patent protection by specific provisions in the legislation. and may not be economically justified if the cost is to be kept within reasonable bounds. In general.72 It is in the interest of both the applicant and the public that there exists the possibility to amend the application. the invention is not new. This type of disclosure. and if he fails to do so within a specified time. Law and Use 2. in particular. As a general rule.69 The search itself will first cover all directly relevant technical fields. as well as on the Internet. an amendment is not allowable if it goes beyond the original disclosure in the application. the Patent . the applicant is given the opportunity to remove any objections raised during the examination as to substance phase. does not seek to determine whether disclosure has taken place by public use. Examination as to Substance 2. since final adjudication on the validity or otherwise of a patent is usually possible via the courts. 2. 2.

Chapter 2 . the maintenance fee is payable even before the patent is granted. The entry in the Official Gazette may also contain the abstract or the main claim and. usually has to be paid to the Patent Office.77 Additionally in countries where annual fee payments are required in order to maintain the patent in force.76 Firstly. a prescribed renewal or maintenance fee. for example. the Register will contain details of when such fees have been paid. 2. and may also list any details of licenses or assignments which may have been recorded. and by third parties subject to the payment of a fee.Fields of Intellectual Property Protection 27 Office will grant a patent on the application. certain Patent Offices have decided to publish certain kinds of patent applications. the name and address of the applicant/patentee. In some countries. provided he pays any necessary renewal or maintenance fees.78 The Register can thus be very useful to third parties especially competitors of the patentee. etc. to decide who shall and who shall not exploit his patented invention. This involves certain actions on the part of the Patent Office. in electronic form only. 2. in order to keep the patent in force.84 The patent owner’s legal rights over his invention are usually limited in a number of quite different ways. He retains this right for the term of the patent. the original application number. Copies of the patent document are made available by the Patent Office for use by patent libraries. Recently. 2. Infringement Exclusive Right of a Patent Owner 2. 2. A copy of the granted patent is also issued at the same time. each year. the Patent Office publishes in an Official Gazette. a reference to the grant of the patent with the prescribed bibliographic data. In some countries the maintenance fee is not required annually but may be paid. the most illustrative drawing. 2. It does not contain any technical information. 2.80 Thirdly. as a source of technical information.82 As stated above. which is the legal document establishing his ownership of the patent. 2. the name of the inventor.. the details of the patent are entered into the Patent Register. the Patent Office generally publishes the patent document itself in printed form. Many Offices also publish the application 18 months after the priority date or filing date. a Certificate of Grant is issued to the applicant. 2. The Register usually contains bibliographic data such as the patent number. In some countries the courts accept a certified copy of an extract from the Register as being proof of the correctness of the position recorded in respect of the patent. the filing date. for the term of the patent. say every three to five years. A small number of countries do not require the payment of maintenance fees. .79 Secondly. enforceable at law. a patentee acquires the right. certain priority application details and the title of the invention. where for example a deferred examination system exists. because it reveals the actual status of the patent.83 Generally speaking. such as applications containing sequence listings or consisting of a high number of pages. when the patent is granted.81 Lastly. if there are drawings.

on terms fixed by agreement or by the courts. where the invention is an improvement or development of an earlier subsisting patent. the terms of the license reflecting the bargaining strength of the parties.90 An infringement of the exclusive right of a patent owner involves the unauthorized exploitation of the patented invention by a third party. a polite letter pointing out the existence of the patent carries the implication that the patentee will sue if the infringement continues. where the public interest so requires. But if the patent owner is reluctant to license on terms acceptable to the licensee. either on his own behalf. This exclusive right of the patent owner has two main applications in practice. be granted to third parties if it can be demonstrated that the patented invention is not worked or is insufficiently worked in the country. the patent owner may need to obtain a license and pay royalties to the earlier patent owner.92 If the infringer is persistent. 2. In many jurisdictions there is a strict rule that the patent owner may not threaten legal action without the possibility of incurring severe countermeasures. he may have recourse to legal action by suing for infringement and seeking an injunction to restrain the infringement. 2. The right of the owner is called exclusive because it allows the exclusion of others from exploiting the invention and because the owner is the only one allowed to exploit the invention as long as others are not given an authorization.85 Firstly.89 With the exception of the limitations just referred to. and its development for industrial application.28 WIPO Intellectual Property Handbook: Policy. The making of the invention in particular. if he wishes to retain his monopoly. 2. a fourth legal limitation on a patent owner’s right to exploit his invention is that patented inventions may often be used by Government or by third parties authorized by Government. A non-voluntary license may. in particular through the sale of products that incorporate the invention. quite apart from the question of validity of his patent. for example.86 Secondly. The main purpose of such provisions in the law is to prevent patent owners from threatening the customers of alleged infringers without pursuing the primary infringer. or by licensing others to use it. Such a letter has proven to be quite effective in suppressing an infringement. including damages. for example.88 Finally. the patent owner may consider whether he wishes to offer a license. usually involve considerable expense for the applicant and for the future owner of the patent for invention. the claims which define the monopoly may be subject to amendment or invalidation by the courts in respect of defects which were not detected prior to the grant of the patent. Law and Use 2. The invariable legal response of an infringer who wishes to pursue the contest is to petition for invalidation of the patent. by way of license to do so. It is he who is responsible for detecting infringements and for bringing them to the infringer’s attention. in part or in whole. The patent owner thus wishes to recover this expense through exploitation of the patented invention. In practice. the patent owner’s rights are usually limited by the patent law. Many incipient disputes are settled through license negotiations at an early stage. Licensing of the patented invention will be discussed in a later chapter. the patent owner is required to work his invention. namely protection against infringement and the possibility of assigning or licensing the right. for instance. 2. 2. 2. In most patent systems.91 Initiative for enforcing a patent rests exclusively with the patent owner. if the threats prove to be on insufficient grounds. Enforcement of Rights 2.87 Thirdly. . the grant of a patent allows its owner to exclude others from exploiting the patented invention.

although the patent owner may feel that his invention has been copied. 2. Third parties then may endeavor to design an alternative to do the same thing. or one or more claims thereof. Such settlements almost invariably involve a license and possibly damages as well. and in so doing may come up with similar ideas to that which may have been involved in the patented invention. the third party has.96 The second situation which arises is where the infringement is deliberate. very few go beyond the pre-trial stage. As soon as a patent owner comes across something which embodies his idea he naturally feels that his invention is being copied. This is not necessarily so. third parties are given ideas. possibly with the help of an unofficial arbitrator. This will either be straight copying of the invention or else involve minor variations or modifications thereof.94 There are several ways in which infringement of patent rights might arise. It frequently happens that once an invention is disclosed either by sale of the product incorporating the invention. or because he has been advised by his patent agent that the patent in question. but they do not typically involve large legal costs. and the only matter to be resolved is whether the claims of the patent are valid. is invalid.93 The great majority of patent infringement disputes never reach the stage of court action but are settled through negotiation. Settlements of this nature can take several years. in fact. If all the features of the patented invention have been copied. arrived at a similar if not identical solution via a different route. The publication generally outlines the problem and shows a way of solving it. Types of Infringement 2. . or in a published patent document. This form of infringement may occur because the third party is unscrupulous. This is probably the most common form of infringement faced by patent owners and it gives rise to the most litigation. especially in complicated cases. 2. but some attempt has been made to avoid the appearance of infringement. the usual outcome being settlement before any court hearing.Chapter 2 .98 To establish infringement the patent owner must prove all the following elements: the carrying out of a prohibited act.95 With this form of infringement there is generally no argument as to whether or not there is infringement. Similarly there may be several companies who have been asked to tender for a contract to solve a particular problem or to achieve a certain result. research departments of different large organizations may all be working on a similar problem. For example. or in some other publication. or the issuance of the patent where no early publication occurs. Of those that do reach the stage at which official legal action is taken. Elements in Establishment of Infringement 2. Firstly. then there must be infringement. since there may be many people working to solve a particular problem at the same time. the prohibited act must have been done in the country where the patent has been granted.Fields of Intellectual Property Protection 29 2. there is the situation where a patent is deliberately infringed by a third party without any attempt to avoid the infringement. the prohibited act must have been done after the publication of the patent application. 2.97 The last situation that arises is the case of accidental infringement. While third parties may be genuinely trying to design around the patent whilst still making use of the basic idea of the inventor. Thus. the result does not always clearly fall outside the scope of the claims of the patent.

three main exceptions in most laws to infringement of exclusive rights to make a patented product. or the making. using.102 One of the difficulties in establishing infringement in respect of products directly obtained through a patented process. and where the patented product is made under a non-voluntary license or under an authorization granted by the Government on public interest grounds. The method of manufacture and the quantity in which the product is manufactured is irrelevant so far as infringement of a patented product is concerned. using. Some laws partially solve this by providing for the reversal of the burden of proof in respect of patents for processes by introducing the following presumption: if the product resulting directly from the use of the patented process was new on the filing date or priority date of the patent application.101 In respect of patented processes. namely: where the use of the patented product is solely for purposes of scientific research and experiment. The use of the patented product is a prohibited act irrespective of whether the product actually being used was made by the patent owner. the most important element in establishing an infringement.” 2. or the use of the patented process. namely: where the patented product is made for the sole purpose of scientific research and experiment. 2.104 There are.100 To make the product means that the product described and claimed in the patent is carried out in practice. with the authorization of that owner. Such making is also referred to as manufacturing especially when the product is produced on a commercial scale. 2. five exceptions to infringement of exclusive rights to use a patented product.30 WIPO Intellectual Property Handbook: Policy. selling or importing the product directly obtained through the patented process.99 A prohibited act. selling or importing the patented product.103 The use of a patented product does not require that the use be repetitive or continuous. Some other laws go further and eliminate the difficulty by not limiting the resulting product to one which has to be new. is that of proving that the patented process was used to produce the product. only the making of products directly obtained through the patented process is a prohibited act. an identical product manufactured by a third party is presumed to have been obtained by the same process. or without the authorization of such owner. The rule is that use is a prohibited act irrespective of who the user of the patented product is. is one which involves the making. “Directly” in this context means “immediately” or “without further transformation or modification. Law and Use - the prohibited act must be in relation to a product or process falling within the scope of a claim of the patent. in most laws. . and for what purpose the patented product is used. where a third party had started making the product before the date when the patent application for an invention incorporated in the product was filed. There are however. 2. Prohibited Acts 2. 2.

2. and where the patented product is used under a non-voluntary license or under an authorization granted by the Government on public interest grounds.Fields of Intellectual Property Protection 31 - where the patented product that is used is a product which was put on the market in the country by the owner of the patent for invention. sale and importation of products directly obtained through a patented process. The patent law of a country has no effect in any other country. Furthermore. particularly U. importation is a physical act of transportation of the product across the border into the territory of the country. generally within a period of three years from the date of grant thereof. Thus. The manner in which the courts will interpret a claim in turn depends upon the domestic law and to a certain extent the . It would be contrary to natural justice if third parties could be charged with committing an offense when details of the invention were not available to the public to see what it is that could not be done. 2. it is possible to extend the coverage of a United Kingdom patent to those countries by the owner of the U. patent applying.K. or for the purposes of distribution free of charge. In the Country where the Patent has been Granted 2. in a small number of countries.107 The principles relating to the use. Generally speaking. The meaning of the claims is ultimately interpreted by the courts.108 The second element in establishing an infringement. patents do not extend beyond the boundaries of the country which granted the patent. applies. or with or without his authorization. where the patented product is used by third parties who have the special right to continue to make the product.K. namely that the prohibited act must have been done after the publication of the invention in either a patent application or in the granted patent.106 Importing a product simply means that an article which constitutes or incorporates the patented product is brought into the country where protection has been conferred. or with his authorization. Dependent Territories.105 The sale of a patented product is a prohibited act irrespective of whether the product actually sold was made by the patent owner. even if made without the authorization of the owner. where the use of the patented product occurs in vehicles in transit in the country. The scope of protection of the patent is determined in all countries by the claims. needs little comment. as far as the definitions of these acts are concerned.109 The third element in establishing an infringement also requires little comment. also to the use. to register such patent in the country concerned. Within the Scope of a Claim of the Patent 2. is a patented product. it does not matter whether the importation takes place for purposes of use or sale. mutatis mutandis. It is irrelevant which other country the product is imported from. After Publication of the Application or Issuance of the Patent 2.110 The fourth element in establishing an infringement is one which is normally the decisive point in any patent litigation. However. It is also irrelevant whether the imported product enjoys patent protection in the country in which it was made or in the country from which it was imported. sale and importation of patented products. Any product that corresponds to the description of the invention and is claimed in the patent.Chapter 2 . 2.

Briefly stated. what a claim means will depend upon the jurisdiction in which it is being interpreted. the establishment of infringement is not always clear-cut. If the claim can. particularly in common law systems. This is the so-called “doctrine of equivalents” which is well known in patent litigation practice in many countries. An infringing product or process must include each and every element of the invention defined in a claim.116 One of the most difficult areas of patent claim interpretation is the determination as to whether or not there has been a substitution of equivalent elements in the alleged infringement.113 When comparing the individual elements of a claim against the corresponding elements of the alleged infringement. on the other hand. . on whether the claim in question is valid. 2. 2.32 WIPO Intellectual Property Handbook: Policy. in fact. then there may indeed be infringement. the doctrine indicates that an infringer should not be allowed to continue his actions where he basically makes use of the patented invention while merely substituting a variant for an element of the invention which is equivalent technically and functionally to the element as contained in the patent claim. depending of course. 2. the claim should be broken down into its individual elements.111 The courts.115 Of course. If. be made to correspond to the alleged infringement without stretching the words of the claim too far. Law and Use rules or regulations. the following questions have to be answered: Are all the elements of the claim present in the alleged infringement? Do all the elements have the same form? Do all the elements perform the same function? Do the elements have the same relationship to the other elements? 2. the claim contains a limitation to something which is not found at all in the alleged infringement. irrespective of whether the variant used by the infringer turns out to be an improvement or otherwise. Moreover the presence of additional elements in an alleged infringement does not avoid infringement if all the elements of the patent claim are also present. changes in form will not avoid infringement if there is no change in the result produced. 2. then infringement is established. Further changing the order of steps in a process will not avoid infringement if the result is the same. and these compared with the elements of the alleged infringement to see whether they fit. 2. and whether or not the alleged infringing structure corresponds to the structure defined in the language of the claims.112 In attempting to answer the question as to whether a particular structure infringes a particular claim of a patent for invention. there may be no infringement. For example. Equivalence is restricted to those cases where the variant or variants used by the infringer function in substantially the same manner and produce substantially the same result as the element or elements contained in the claim or claims. attempt to determine what structure the language of the claims defines.114 If the answer to each of these questions is “yes”. Therefore.

that the patent existed. nevertheless.Chapter 2 . civil sanctions are available in all cases of infringement while criminal sanctions are available only under particular circumstances. 2. an account of profits can be very near to the actual profits made. or is occurring.119 Civil sanctions normally available include the award of damages. 2.123 Criminal sanctions depend on the structure of the criminal law and the procedures applicable in the country. or both. Exploitation of the Patented Invention Selling an Invention 2. This does not mean that the patent owner will necessarily receive all the profits the infringer has made on the infringing articles but. where the infringement was committed intentionally. 2. Statistics on local populations . an infringer will not be liable to damages if he proves that at the date of infringement he was not aware.121 Under some national laws. 2. Damages will only be awarded against the infringer for infringements committed since the date of publication of the invention by the Patent Office in the patent application or the granted patent. In such a case the court will issue an order directing the infringer to stop making further copies or infringements of the patented invention.122 An injunction is a prohibition of the infringing act. it is likely that damages will be fixed at a higher figure. damages would be based on an account of profits. the inventor should also discover whether there is an adequate market for the product covered by his invention. civil sanctions and criminal sanctions. 2. One way would be to set damages at the amount of the financial loss suffered as a result of the infringement by the patent owner. the grant of an injunction. In this case a court may decide that damages should be no less than the royalty payments per article and. 2. he is entitled to damages. The amount of damages may be calculated in at least two different ways. 2.Fields of Intellectual Property Protection 33 Remedies Available to the Patent Owner 2. which the court will assess. and had no reasonable ground for supposing. The usual forms of criminal sanction are punishment by imprisonment or by a fine.117 The remedies which may be available to the patent owner where infringement has been established are usually provided for in the national patent law and are generally in two forms. Where the infringing act has not yet been committed but where preparations have been made by a third party with a view to committing an infringing act (“imminent infringement”) the injunction means that infringement may not be started. or any other remedy provided in the general law such as the seizure and destruction of the infringing products or the tools used for the manufacture of those products. Damages may also be assessed by taking into account the royalty being paid by any licensees. as they are damages and not royalties.120 If the patent owner establishes in court that infringement has occurred.125 Who will buy the product? How many people make up the potential market? This is a difficult figure to assess but is one of the keys to product survival. Under a second method of calculation.124 It is not enough to assess the product itself.118 Broadly speaking.

there are two methods the inventor can use to get his idea into production.130 Larger corporations often publish their policies and procedures regarding new product ideas from outside sources.34 WIPO Intellectual Property Handbook: Policy. Alternatively. Other companies are wary of inventors who may claim that their ideas have been stolen. companies are besieged with unsolicited ideas from the public. They introduce the product in limited quantities to those viewed as a typical segment of their potential market.128 Basically. multinational corporations and the like are showing increasing interest in taking up embryo or partially developed technology with the object of completing development and thus gaining from the research effort and securing a significant lead over competitors. The beneficiary of a voluntary license has the right to perform acts covered by the exclusive right under an authorization from the owner of the patent for invention. 2. 2. naturally.” Most companies would prefer that the inventor merely send them a copy of his patent on a new idea. Some have “submitted ideas departments. as well as surveys by private firms. the inventor should be aware of the company’s policy regarding unsolicited ideas before he sends it. Some companies reserve the right to make arbitrary payment for ideas as they see fit. 2.129 Some companies receive new product ideas with coolness. favors in-house developments. research establishments. Alternatively he can become a manufacturer himself.133 Licenses that are granted by the owner of the patent are considered “voluntary”. marital status and so on. the beneficiary of a non-voluntary license has the right to perform acts covered by the exclusive right under an authorization given by a government authority against the will of the owner of the patent for invention.131 When submitting an idea which is not patentable. Compulsory Licenses 2. In contrast.126 For some of the more sophisticated technology. or enter into a licensing agreement with the company.127 “Test marketing” is a stage that many larger companies go through before commencing full scale production. either establishing a factory or contracting out production to a job or machine shop if appropriate. 2. when in fact the company may have been already working on the same idea. The authorization in a contract is generally called a license contract concluded between the owner of the patent for invention and the beneficiary of the license. can provide the basis for a study of the proposed market areas by age group. The small businessman also should consider using this technique before he commits too much time and money launching a product that ultimately may not sell. Larger corporations frequently have research and development departments in which substantial sums of money have been invested. the inventor can submit a copy of his patent application as soon as it has been filed. as distinguished from “compulsory” or “non-voluntary” licenses. Management. Law and Use and potential market segments published by the relevant government agencies. . He can sell or license his product idea to a company equipped to manufacture it. very few of which are even worth serious consideration. the inventor may be able to choose whether he wishes to sell his patent outright for a lump sum.132 If a patented idea is accepted. 2. 2. 2. Often.

defense. it usually means at least. Under Article 5A(2) of the Paris Convention. failure to work is given as an example of such an abuse. 2. in order to be fully justified the patented invention should be worked in the country where the patent is granted. and In the Public Interest: Some countries provide for the grant of a non-voluntary license in the case where a non-voluntary license is deemed necessary for reasons of public welfare. Moreover. it is believed in some countries that. and not serve only as an exclusive right to prevent others from doing so or to control importation. whereas non-voluntary licensing should not be viewed as playing such a role but should be limited to correcting abuses which may arise in the exercise of patent rights. in the case of a patent having been granted in respect of a process. voluntary licensing clearly offers one means whereby the transfer of technology can be facilitated. the technology disclosed in a patent can be freely used by anyone without obtaining the patent owner’s permission.137 Despite these benefits. and development of the economy. the current trend is away from this requirement. such licenses generally fall into two categories: In the Event of Abuse of the Patent: Some countries provide for the grant of compulsory licenses to prevent the abuses which might result from the exercise of the exclusive rights conferred by the patent. 2.139 The first argument against non-voluntary licenses is that they are less effective than voluntary licensing in encouraging the transfer of technology. the making of the product and. That is. 2. the actual working of patented inventions in a given country being seen as the most efficient way of accomplishing such a transfer to that country. and may. While the laws of some countries specifically provide that the importation of a product that includes the invention does not constitute working.138 The arguments against compulsory working of an invention in a particular country are twofold: first. As a rule. even apart from their being worked. as their publication may inspire other inventions.135 While the definition of “working” is generally a matter of national law.136 At the outset it should be recalled that a patent must disclose the invention in a manner such that one skilled in the art can carry it out. are considered beneficial to industry. The Grant of Non-Voluntary Licenses to Remedy Abuses Resulting from the Exercise of the Patent Right Non-Working of a Patent 2. In the present context. including health. The principal goal of requiring local working of a patented invention is the transfer of technology.140 The transfer of technology is best done in an atmosphere of cooperation between the transferor and the transferee. that means between the patent owner and . Thus patents. 2. the inventions described in patents fall into the public domain after the expiration of their term.Fields of Intellectual Property Protection 35 2. Stated another way. 2. the working requirement may be fulfilled through the working of the patented invention either by the owner of the patent for invention or by another entity or person under a license contract. that it may not be economically feasible to do so. that such compulsory working of inventions may work against the goal of transferring technology and secondly. indeed. in the case of a patent directed to a product.Chapter 2 .134 In countries where the grant of non-voluntary licenses is provided for. even be counterproductive to that goal. after their expiration. the use of the process.

for example. it is bound to that enterprise and cannot be transferred separately from that enterprise. the environment of cooperation usually found in the case of voluntary licensing is more effective than the environment of coercion in promoting the full and continuing transfer of technology. This time limit expires either four years from the date of filing of the patent application or three years from the date of the grant of the patent for invention. the request for a compulsory license must be rejected. may be made cheaper if production is consolidated in one facility in one country. The patent owner must be given a longer time limit. namely to ensure sufficient working of the invention in the country. The patent owner must retain the right to grant other non-exclusive licenses and to work the invention himself. The applicable time is the one which. In the case of a non-voluntary license the atmosphere of cooperation.144 The time limit of three or four years is a minimum time limit which recognizes that it may take some time for the owner of a patent to begin working the patented invention in each country where he has obtained patent protection. the invention in the country.36 WIPO Intellectual Property Handbook: Policy. These limitations are intended to prevent a compulsory licensee from obtaining a stronger position on the market than is warranted by the purpose of the compulsory license. That is. they are of little practical importance. a patent owner may find that products incorporating a patented invention. such provisions do serve as a legal possibility which may encourage a patent owner to more readily enter into a voluntary license agreement. it may not be economically feasible to require a patent owner to manufacture products in accordance with his patent in every country in which patent protection has been obtained. Thus the grant of a non-voluntary license under a patent results in a bare right to work the patented invention. 2. Moreover. or made by a patented process. because the compulsory license has been granted to a particular enterprise on the basis of its known capacities. which are themselves protected by patents.141 Moreover. is absent. 2. That cooperation generally leads to the disclosure of non-patented “knowhow” which is necessary to make a commercially viable product. or working more intensively.142 In response to these criticisms of non-voluntary license provisions. First. If that is proven. Law and Use the potential licensee. Indeed. 2. even if those provisions are seldom applied. at least for the time being. including failure to work. two points are often made. but which was not necessary to satisfy the disclosure requirement to obtain the patent. Secondly. with final assembly being conducted in one facility or on a regional or national basis. The time limit of three or four years is a minimum time limit also in that sense that national law can provide for a longer time limit. 2. Such a requirement does not allow cognizance to be taken of regional or international integration of markets or of comparative advantages of countries or regions.143 Article 5A(2) of the Paris Convention specifically provides that countries of the Paris Union may provide for the grant of non-voluntary licenses to prevent abuses resulting from the exercise of patent rights.145 Article 5A(4) further provides that the compulsory license for non-working or insufficient working must be a non-exclusive license and can only be transferred together with the part of the enterprise benefiting from the compulsory license. the patent owner may find that individual components of his product. which is likely to be an insufficient vehicle for the full transfer of technology. with the demand in other countries being satisfied by importation. in the individual case. 2. that legal. may be best manufactured in several countries or regions. expires last. economic or technical obstacles prevent working. Nonetheless. if he can give legitimate reasons for his inaction. since in countries with such provisions they are seldom applied for and even less likely to be granted. . Article 5A(4) provides that compulsory licenses for failure to work or insufficient working of the invention may not be requested before a certain period of time of non-working or insufficient working has elapsed. and hence the disclosure of non-patented know-how.

Forfeiture or Revocation of the Patents in the Event of Abuses 2.150 Some countries provide for a compulsory license when there has been no “abuse” of the patent right but where the grant of a non-voluntary license is deemed necessary to protect the public interest. Safeguards are also provided under Article 31 of the TRIPS Agreement (see below. and if the owner of the dependent patent has not been able to conclude a license contract with the owner of the dominant patent on reasonable terms. On the contrary. but in favor of private parties. in some countries. This inability to work a dependent patent is seen. Since the grant of such a license is without the consent of the patent owner. In such a situation. should be established to ensure that non-voluntary licenses are properly granted and executed.” The Grant of Non-Voluntary Licenses in the Public Interest 2. 2. national laws dealing with this question generally require that the licensee make payments to the patent owner on the basis of the working of the invention. the granting authority. . Moreover. the owner of the dominant patent could prevent the working of the invention claimed in the dependent patent by refusing to grant a license.Fields of Intellectual Property Protection 37 Procedural Safeguards and Compensation 2.” Such non-voluntary licenses are granted to remedy the situation that arises when it is not possible. the owner of the dependent patent may obtain a non-voluntary license under the dominant patent.Chapter 2 .146 The grant of a non-voluntary license results in the use of a very valuable property right of the patent owner. Without that possibility. allowing the patent owner to state his position in this regard. in most instances. and should provide means whereby the non-voluntary license may be cancelled if the grounds for the grant of the non-voluntary license no longer exist or if the obligations under the non-voluntary license are not met by the beneficiary thereof.151 One example of a non-voluntary license granted in the public interest. should ensure that the conditions for the grant of a non-voluntary license are met.148 The grant of a non-voluntary license does not mean that the beneficiary (the licensee) need not pay royalties. That paragraph further provides that “No proceedings for the forfeiture or revocation of a patent may be instituted before the expiration of two years from the grant of the first compulsory license. or in favor of a person acting on behalf of the government. Article 5A(3) envisages the forfeiture or revocation of the patent in cases where the grant of such compulsory licenses is not sufficient. is in the case of the so-called “dependent patents.149 While it is anticipated that the grant of a compulsory license would. such as a patent office. In general. be sufficient to correct abuses. without performing acts covered by one patent (the “dominant patent”). including an effective appeal procedure. as being contrary to the public interest in having the unencumbered working of all patented inventions. under Compulsory Licenses under the TRIPS Agreement). 2. to work an invention claimed in another patent (the “dependent patent”). reasonable procedural safeguards. Non-Voluntary Licenses Granted in the Public Interest in Favor of Private Parties 2. the granting authority should ensure that adequate payment by the beneficiary of the non-voluntary license is made to the patent owner. non-voluntary licenses granted in the public interest can be divided into those that are granted in favor of private parties and those that are granted in favor of the government itself.147 In particular.

any entity or person designated by the Government.155 A number of countries allow the government to exploit inventions without the consent of the owner of the patent. Once the epidemic has been brought under control.38 WIPO Intellectual Property Handbook: Policy. its unenforceablility or its invalidity. as a consequence of the anti-trust violation.159 Reference is made to the section in Chapter 5 which explains the TRIPS Agreement. 2. if the owner of the dependent patent has obtained a compulsory license under the dominant patent. thanks to a compulsory license.158 Because the grant of non-voluntary licenses confers the right to use a valuable property right of the patent owner. . however. without his consent.152 Some national laws grant such non-voluntary licenses any time a situation of dependency arises. provided certain conditions are respected. provisions should be made for the compensation of the patent owner for the use of his property rights. national economy and public health. In each specific case. or on its Behalf 2. The Agreement does not prescribe nor limit the grounds on which such authorizations may be granted. and the owner of the patent for invention will recover the full control of the rights attached to the patent. 2. in the public interest. Safeguards are also provided under Article 31 of the TRIPS Agreement (see below).153 In order to introduce a certain balance between the positions of the owners of the two patents for invention. some countries provide that the use of a patent in violation of competition (anti-trust) laws is contrary to the public interest. Moreover. or to have third parties exploit the invention on its behalf. it is often provided in national laws that the owner of the dominant patent may obtain a compulsory license under the dependent patent. to work an important invention. there is no reason to maintain the measure.154 In addition to non-working. That latter condition serves the purpose of avoiding abuses which could result from applicants filing patent applications on trifling inventions for the sole purpose of being able.157 This kind of measure in the public interest suits situations that arise in cases of national emergency particularly well. Other national laws require that the dependent patent must serve a different purpose from that of the dominant patent or constitute a real technical advance in relation to the invention claimed in the dominant patent. to perform any of the acts which are covered by the patent for invention. warranting the compulsory licensing of that patent. Non-Voluntary Licenses Granted in the Public Interest in Favor of the Government. Law and Use 2. To take the example of medical equipment. it should be sufficient for the State to authorize.156 In most cases of public interest. 2. Article 31 of the TRIPS Agreement allows Members to authorize third persons to exploit a patented invention. the Government will decide which of those acts may be performed. Procedural Safeguards and Compensation 2. There are typically three fields in which this may occur: national defense. the Government might decide to ask another entity to import the apparatus or might decide to import it itself. even against the will of the patent owner. procedural safeguards should be established to ensure that the grant of such licenses is only when. the conditions warrant it. Compulsory Licenses under the TRIPS Agreement 2. it might be necessary to import that equipment very quickly in case of a sudden epidemic. against the will of the owner of the patent for invention. and for as long as. 2. If the owner of the patent is not willing to import or to conclude a license contract for importation on reasonable terms.

This requirement may be waived by a Member in the cases of a national emergency or other circumstances of extreme urgency.Fields of Intellectual Property Protection 39 2. A compulsory license must be non-exclusive. the following additional conditions must be applied: (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) . The competent authority of the Member must have the power to refuse termination of a compulsory license if the conditions that justified its grant are likely to recur. if the circumstances that justified its grant have ceased to exist and are unlikely to recur. A compulsory license can only be granted if the proposed compulsory licensee has made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and if such efforts have not been successful within a reasonable period of time. including compulsory licenses by or on behalf of the government. taking into account the economic value of the allowed use. so that the later patent cannot be exploited without infringing the earlier patent. The scope and duration of a compulsory license must be limited to the purpose for which it was authorized. or provides for other uses of the patented invention without the authorization of the patent owner. the following conditions must be complied with: (a) Authorization of a compulsory license must be considered on its individual merits. The patent owner must be paid adequate remuneration in the circumstances of each case. A compulsory license must be authorized predominantly for the supply of the domestic market of the Member that grants the license. The legal validity of any decision relating to the grant of a compulsory license must be subject to judicial review or other independent review by a distinct higher authority in the Member that granted the license. subject to adequate protection of the legitimate interests of the compulsory licensee. This means that applications for compulsory licenses must be considered on a case-by-case basis. The need to correct anti-competitive practices may be taken into account in determining the amount of remuneration in such cases. A Member is not obliged to apply the conditions set forth in items (b) and (f) above where the compulsory license is granted to remedy a practice determined to be anti-competitive. In cases of dependency between two patents belonging to different owners. in the case of semi-conductor technology a compulsory license may only be granted for public non-commercial use. A compulsory license may not be assigned without that part of the enterprise or goodwill which produces the product under that license. A compulsory license must be liable to be terminated. Any decision relating to the remuneration in respect of a compulsory license must be subject to judicial review or other independent review by a distinct higher authority in the Member that granted the license.160 Where the law of a Member allows for such compulsory licenses.Chapter 2 . or to remedy a practice determined to be anti-competitive. or in cases of public non-commercial use. However.

162 Copyright law is a branch of that part of the law which deals with the rights of intellectual creators. Utility Models 2. Copyright law protects the owner of rights in artistic works against those who “copy”.” In essence “utility model” is merely a name given to certain inventions. and even computerized systems for the storage and retrieval of information. But some of them exist without embodiment in a physical object. The document that the inventor receives in the case of a utility model may be called.” Copyright and Related Rights Introduction 2. Utility models differ from inventions for which patents for invention are available mainly in two respects. The creativity protected by copyright law is creativity in the choice and arrangement of words. musical notes. films for public exhibition in cinemas.40 WIPO Intellectual Property Handbook: Policy. written down by a musical notation or words.161 In a number of countries protection may be obtained for “utility models. not the ideas themselves. shapes and so on. the technological progress required is smaller than the technological progress (“inventive step”) required in the case of an invention for which a patent for invention is available. For example music or poems are works even if they are not. Second. one must.163 Copyright deals with the rights of intellectual creators in their creation. the owner of the first patent is entitled to a cross-license on reasonable terms to use the invention claimed in the second patent. 2. protects only the form of expression of ideas. or even before they are. etc. not only printed publications but also such matters as sound and television broadcasting. namely—according to the laws of most countries which contain provisions on utility models—inventions in the mechanical field. in order to distinguish it from patents for invention. for example books. Copyright law deals with particular forms of creativity. It is concerned also with virtually all forms and methods of public communication. Most works. 2. If it is called a patent. and in several countries is called. . a patent. the maximum term of protection provided in the law for a utility model is generally much shorter than the maximum term of protection provided in the law for an invention for which a patent for invention is available. This is why the objects of utility models are sometimes described as devices or useful objects. always specify that it is a “patent for utility model. exist only once they are embodied in a physical object. colors.164 Copyright law. and the use authorized in respect of the first patent may not be assigned except with the assignment of the second patent. that is to say those who take and use the form in which the original work was expressed by the author. paintings or drawings. concerned primarily with mass communication. First. however. Law and Use - the invention claimed in the second patent must involve an important technical advance of considerable economic significance in relation to the invention claimed in the first patent.

serves as an incentive to authors and their assignees (the publishers) to create and disseminate knowledge. economic and cultural development. Copyright. 2. the higher its renown. The protection of these auxiliaries of intellectual creators is also of importance to developing countries since the cultural achievement of some of these countries includes. 2. the various links.169 Copyright protection. There is the shortage of paper for the production of textbooks for the process of continuing education (both formal and non-formal). The greater the number of a country’s intellectual creations. especially in the field of science. distribution and . in respect of their own rights. publishing. producers of phonograms and broadcasting organizations) in the book. A country’s development depends to a very great extent on the creativity of its people. apart from the pecuniary condition of most of the authors and intellectual creators themselves. etc. 2. which are to be placed within the reach of the common man in these countries.167 Legislation could provide for the protection not only of the creators of intellectual works but also of the auxiliaries that help in the dissemination of such works. and indeed. to promote the industry using authors’ works and to render it possible to distribute such works in an organized manner among the widest possible circle of interested persons. While developing countries are often in need of foreign books. in the final analysis.165 Copyright protection is above all one of the means of promoting. encouragement of intellectual creation is one of the basic prerequisites of all social. the greater the number of productions in literature and the arts. if effectively implemented. makes sense only if the creator actually derives benefits from such works.171 The role of governments in this activity could include financial assistance in the creation and production of textbooks and other educational literature. who need to be offered incentives and subsidies. 2. education and research. within the framework of copyright legislation.166 Copyright constitutes an essential element in the development process. This can be achieved through setting up of appropriate authors’ organizations for collection and distribution of authors’ fees. inputs for training and also help for expansion of the library system. Experience has shown that the enrichment of the national cultural heritage depends directly on the level of protection afforded to literary and artistic works. 2. and this cannot happen in the absence of publication and dissemination of his works and the facilitation of such publication and dissemination. through protection of the rights of these auxiliaries or of related (or neighboring) rights as they are called. It is something that society must necessarily accept if it wishes to encourage intellectual creativity. The practical value of the law depends on its effective and efficient application. This is the essential role of copyright in developing countries. the creation of mobile libraries to serve far-flung and remote rural areas.170 There are several factors influencing intellectual creativity in developing countries. in no small measure. from the viewpoint of the creator of works. 2.168 Adoption of the law is the first step. enriching and disseminating the national cultural heritage. namely authorship. In this whole chain. and for production of prescribed and recommended books as also general books. performance. and encouragement of individual creativity and its dissemination is a sine qua non for progress. record and entertainment industries. to ensure the progress of the sciences. they could offer to the world an abundance of their national cultural heritage. the arts and of knowledge in general. which can be protected.Chapter 2 . technology. sound recording and broadcasting of different creations of their folklore as well.Fields of Intellectual Property Protection 41 Copyright Protection 2. the more numerous their so-called “auxiliaries” (the performers.

poems. the gradual disappearance of the feudal order. a good or a bad literary or musical work—and even of the purpose for which it is intended. and rapid strides in technological development on the other. form (handwritten. dramatic works and any other writings. or even maps. pamphlet. the emphasis on the use of national languages. it must be an original creation. The ideas in the work do not need to be new but the form. songs. because the use to which a work may be put has nothing to do with its protection. length. To be protected by copyright law. cannot be underrated. operettas. 2. typed. of inventiveness. have brought about substantial changes of outlook in relation to copyright. however. The work is protected irrespective of the quality thereof and also when it has little in common with literature. purpose (amusement.). choruses. musicals. whether for one instrument (solos). For a work to enjoy copyright protection. if for instructions. newspaper. magazine). A non-exhaustive. such as purely technical guides or engineering drawings.172 In the late nineteenth and in the twentieth century considerable socio-economic and political changes on the one hand.” that is. The freedom and expansion of the press.). etc.174 The subject-matter of copyright protection includes every production in the literary. institutions of higher learning and libraries. the changed map of the world with the birth of a number of newly independent developing nations—all these factors have caused conceptual changes. propaganda. printed. musical works: whether serious or light. . 2. 2. according to taste. whether published or unpublished. works not reduced to writing. etc. orchestras). irrespective of their content (fiction or non-fiction). the growth of adult training and mass education schemes. in most countries “oral works.175 Works eligible for copyright protection are. or many (bands. as a rule. art or science. are also protected by the copyright law. thus laws and official decisions or mere news of the day are generally excluded from copyright protection. education. the development of science and technology. chamber music. all original intellectual creations. finally. short stories. book. information. that works should pass a test of imaginativeness. single sheet. And. Subject Matter of Copyright Protection 2. advertisement. protection is independent of the quality or the value attaching to the work—it will be protected whether it be considered. and need to be carefully nurtured and coordinated. scientific and artistic domain. be it literary or artistic. Exceptions to the general rule are made in copyright laws by specific enumeration. operas. illustrative enumeration of these is contained in national copyright laws.42 WIPO Intellectual Property Handbook: Policy.173 The challenge in this new situation is to maintain a balance between provision of adequate rewards to creators of works and ensuring that such rewards are in harmony with the public interest and the needs of modern society. whatever the mode or form of expression. in which they are expressed must be an original creation of the author.176 Practically all national copyright laws provide for the protection of the following types of work: literary works: novels. the raising of standards in higher education. they must have their origin in the labor of the author. to qualify for copyright protection. a few instruments (sonatas. the increase in the number of universities. an author’s works must originate from him. 2. Law and Use fostering of the library movement on a broad base. But it is not necessary.

whether in the form of printed copies or digital media such as CD-ROMs. lithographs. etc. wallpaper. the making of copies of a protected work is the act performed by a publisher who wishes to distribute copies of a text-based work to the public. DVDs. etc. and irrespective of their purpose (theatrical exhibition. maps and technical drawings. etc. requiring the authorization of the copyright owner. etc. broadcasting the work.177 Many copyright laws protect also “works of applied art” (artistic jewelry. furniture. method employed (filming “live. Some regard phonograph records.Chapter 2 . or technical process used (pictures on transparent film. adapting the work. on the authorization given by the composers of . Right of Reproduction and Related Rights 2.) or three-dimensional (sculptures. making a motion picture of the work.). 2. etc. lamps.181 What is meant by “using” a work protected by copyright? Most copyright laws define the acts in relation to a work which cannot be performed by persons other than the copyright owner without the authorization of the copyright owner. documentaries. current events. etc. landscapes. newsreels.Fields of Intellectual Property Protection 43 artistic works: whether two-dimensional (drawings. 2. translating the work. tapes and broadcasts also as works. photographic works: irrespective of the subject matter (portraits. paintings.). for advertisement. etc.179 Therefore. computer programs (either as a literary work or independently).).183 The right of the owner of copyright to prevent others from making copies of his works is the most basic right under copyright.). in part. their genre (film dramas. Likewise. television broadcasting. 2. motion pictures (“cinematographic works”): whether silent or with a soundtrack. performing the work in public. length. 2. making a sound recording of the work. etchings.). 2. irrespective of content (representational or abstract) and destination (“pure” art.) and the purpose for which they are made. the rights bestowed by law on the owner of copyright in a protected work are frequently described as “exclusive rights” to authorize others to use the protected work. normally are the following: copying or reproducing the work. the right of a phonogram producer to manufacture and distribute compact discs (CDs) containing recorded performances of musical works is based.) and choreographic works. architectural works). etc.180 The original authors of works protected by copyright also have “moral rights”.” cartoons.182 Such acts. Rights Comprised in Copyright 2. For example.178 The owner of copyright in a protected work may use the work as he wishes—but not without regard to the legally recognized rights and interests of others—and may exclude others from using it without his authorization. in addition to their exclusive rights of an economic character. videotapes.

This is another example of the fact that the owner of copyright in a work cannot use it or authorize the use of it in a way which is contrary to the legal rights of others.185 Another act requiring authorization is the act of public performance—for example. the right to control the act of reproduction is the legal basis for many forms of exploitation of protected works. For example. 2. a work written originally in a particular way in order to be read at home or in a library may be transformed (“adapted”) into a drama designed to be performed in public on the stage of a theater. Law and Use such works to reproduce their compositions in the recording. some copyright laws include a right to control importation of copies as a means of preventing erosion of the principle of territoriality of copyright. Finally. the owner of that copy may dispose of it without the copyright owner’s further permission. 2. such as musical works included in phonograms. the legitimate economic interests of the copyright owner would be endangered if he could not exercise the rights of reproduction and distribution on a territorial basis. sound recording is the most favored means of communicating a work to a wide public. Therefore. and therefore.241). that is. public readings. Recording Rights 2. for example. after the copyright owner has sold or otherwise transferred ownership of a particular copy of a work. experience in some countries has shown that copies were made by customers of rental shops. some laws include a right to authorize distribution of copies of works. audiovisual works. that the right to control rental practices was necessary in order to prevent abuse of the copyright owner’s right of reproduction. This serves much the same purpose for musical works as books serve for literary works. which means that. Another right which is achieving wider and wider recognition. the maker of a sound recording must also obtain the authorization of the performers who play the music and who sing or recite the words. So far as music is concerned.186 The third act to be examined is the act of making a sound recording of a work protected by copyright. including in the TRIPS Agreement (see chapter 5. words alone or both music and words. but also to the owners of copyright. when others may wish to arrange the public performance of works originally intended to be used by being reproduced and published.44 WIPO Intellectual Property Handbook: Policy. is the right to authorize rental of copies of certain categories of works.184 Other rights are recognized in national laws in order to ensure that the basic right of reproduction is respected.188 Under the laws of some countries. and computer programs. For example. in the case of a sound recording incorporating both music and words. dramatic and musical performances before an audience. The right of distribution is usually subject to exhaustion upon first sale or other transfer of ownership of a particular copy. Performing Rights 2. then. The right to authorize the making of a sound recording belongs to the owner of the copyright in the music and also to the owner of the copyright in the words. 2. . the maker of the sound recording must obtain the authorization of both owners.187 Sound recordings can incorporate music alone. and to persons authorized by them. The right to control this act of public performance is of interest not only to the owners of copyright in works originally designed for public performance. The right of rental is justified because technological advances have made it very easy to copy these types of works. If the two owners are different. paragraph 5. by giving it away or even by reselling it.

for example adapting a novel so as to make a motion picture.195 The broadcasting and diffusion by cable of works protected by copyright have given rise to new problems resulting from technological advances which may require a review by governments of their national copyright legislation.” The expression “motion picture” is perhaps preferable. who possesses the equipment (radio or television receiver) necessary to convert the signal into sounds or sounds and images.192 When a work is broadcast. a signal is diffused which can be received only by persons who possess such equipment linked to the cables used to diffuse the signal. because such productions are. and the increasing use of equipment able to record sound and visual images which are broadcast or diffused by cable. 2. 2. 2. Broadcasting Rights 2. 2. or the modification of a work so as to make it suitable for different conditions of exploitation. such audiences can see the motion picture far away from the place of live performance and at times much later than the live performance.194 In principle. according to the Berne Convention for the Protection of Literary and Artistic Works.197 “Translation” means the expression of a work in a language other than that of the original version.” In some countries the word “film” is used instead of the expression “motion picture. The advances include the use of space satellites to extend the range of wireless signals. a wireless signal is emitted into the air which can be received by any person.189 A “motion picture” is a visual recording. giving to viewers an impression of motion. for example adapting an instructional textbook originally prepared for higher education into an instructional textbook intended for students at a lower level. frequently made with technological methods (such as magnetic tape) which do not require the use of photographic film.Fields of Intellectual Property Protection 45 Motion Picture Rights 2. the increasing possibilities of linking radio and television receivers to signals diffused by cable. . today.196 The acts of translating or of adapting a work protected by copyright require the authorization of the copyright owner. 2. In the technical language of copyright law it is often called a “cinematographic work” or an “audiovisual work. Translation and Adaptation Rights 2.198 “Adaptation” is generally understood as the modification of a work from one type of work to another. 2.Chapter 2 . owners of copyright have the exclusive right of authorizing both the wireless broadcasting and the diffusion by cable of their works. within range of the signal.193 When a work is communicated to the public by cable.191 A major category of acts restricted by copyright consists of the acts of broadcasting works and of communicating works to the public by means of wires or cables. 2.190 A drama originally written for performance by performers to an immediately present audience (“live performance”) can be visually recorded and shown to audiences far larger in numbers than those who can be present at the live performance.

mutilation or other modification of. the right to object to any distortion. 2. a song needs to be performed by artists. is attempted by means of related rights.”) in an abbreviated expression. or other derogatory action in relation to.202 There exist rights related to. Protection of those who assist intellectual creators to communicate their message and to disseminate their works to the public at large. Moral Rights 2. Their works are intended to be made available to the public at large. Therefore.201 These rights. . for it requires intermediaries whose professional capability gives to the works those forms of presentation that are appropriate to make them accessible to a wide public. Various categories of works are made accessible to the public in various ways. 2.199 Translations and adaptations are themselves works protected by copyright. are required to be independent of the usual economic rights and to remain with the author even after he has transferred his economic rights. The interests of book publishers are protected by means of copyright itself and laws do recognize that copyright is essential as a stimulus to creative writing. Related Rights 2. A publisher reproduces a manuscript in its final form without adding to the expression of the work as created by the author. A play needs to be presented on the stage. in order.200 The Berne Convention requires member countries to grant to authors: the right to claim authorship of the work. and the rights of broadcasting organizations in their radio and television programs. 2. which are generally known as the moral rights of authors. for example. artistic or scientific works in order to make them publicly accessible to others require their own protection against the illegal use of their contributions in the process of communicating the work to the public. the rights of producers of phonograms in their phonograms. Law and Use 2. 2.46 WIPO Intellectual Property Handbook: Policy. reproduced in the form of records or broadcast by means of radio facilities. These rights are generally referred to as “related rights” (or “neighboring rights.204 Works of the mind are created in order to be disseminated among as many people as possible. to reproduce and publish a translation or adaptation. as also to support the economies of publishing.203 It is generally understood that there are three kinds of related rights: the rights of performing artists in their performances.205 Let us examine why such protection of those that thus assist intellectual creators was found necessary and how it developed. the publisher must have the authorization both of the owner of the copyright in the original work and of the owner of copyright in the translation or adaptation. This cannot be done generally by the author himself. or “neighboring on”. All persons who make use of literary. copyright. The protection of authors’ interests does not consist merely in preventing the use of their creations and cannot be limited to prohibiting infringements of the rights that laws afford to the authors. the work which would be prejudicial to the author’s honor or reputation.

.Fields of Intellectual Property Protection 47 2. While a performer would be paid once for recording a performance. 2.Chapter 2 . thus giving a new dimension to the protection of the interests of performers. there were the interests of broadcasting organizations as regards their individually composed programs. television. records. In such cases. compact discs (CDs). 2. also had similar effects. the radio. there is the increasing use of records and discs by broadcasting organizations.210 Likewise by the very same token. the performers felt that they would not only not derive any income from such secondary use. etc. 2. The appeal of the phonogram. it is no longer so with the advent of the phonograph. the television. viz. In addition. the increasing technological development of phonograms and cassettes and.208 These technological developments made possible the fixing of performances on a variety of material. there arises the interest of the performers themselves in relation to the use of their individual interpretation in the performed work. and the recording of the performance could be played repeatedly for the benefit of a third party. The performers through their organizations at the international level sought a study leading to their protection. created the growing problem of piracy. tapes. The broadcasting organizations required their own protection for these as well as against retransmission of their own programs by other similar organizations. at the very beginning of the 20th century. producers of phonograms and broadcasting organizations. films. cafés. pantomimes. as also the easy availability in the market of the variety of increasingly sophisticated recording devices.206 The position is slightly different with regard to dramatic and musical works. was pointing to the need of protection of producers of phonograms. or musicians ended with the play or concert in which they performed. 2. Where some of such works are communicated to the public. Where. since they have made it possible to reproduce individual performances by performing artists and to use them without their presence and without the users being obliged to reach an agreement with them. while the use of these by the latter provides publicity for the phonograms and for their producers. become an essential ingredient of the daily programs of broadcasting organizations. which by now has become a worldwide scourge. This creates what has come to be known as technological unemployment among professional artists.209 These technological innovations. restaurants. Consequently. or other types of creative works intended for either auditive or visual reception. the motion picture.207 The problem in regard to this category of intermediaries has become more acute with rapid technological developments.. 2. have led to a reduction in the number of live performances. as also for remuneration for the use of phonograms for purposes of broadcasting or other forms of communication to the public. the performance of dramatists. The development of broadcasting and more recently. the videogram and satellites.211 Finally. cassettes. 2. in turn. and their rapid proliferation. etc. these also have. they are produced or performed or recited with the aid of performers.212 Thus the need was felt for special protection for performers. more recently. actors. just as the performers were seeking their own protection. What was earlier a localized and immediate phase of a performance in a hall before a limited audience became an increasingly permanent manifestation capable of unlimited and repeated reproduction and use before an equally unlimited audience that went beyond national frontiers. but would also be placed in the awkward position of having to compete with their own recordings in respect of their employment potential for live performances in theaters. the producers of phonograms began to pursue the case of their protection against unauthorized duplication of their phonograms.

2.214 The notion of Related Rights is understood as meaning rights granted in an increasing number of countries to protect the interests of performers. or of any other sounds not taken from another existing fixation. by a distributor for whom the signal is not intended. declaim. A broadcast is any program transmitted by broadcasting. or expressions of folklore. dancers. against certain unlawful uses of their performances. No protection of any related right can.216 Communication to the public by wire is generally understood as meaning the transmission of a work. Gramophone records (discs). and any sounds or images. The most important categories are: the right of performers to prevent fixation and direct broadcasting or communication to the public of their performance without their consent. which follow national legislation and provide a synthesis of existing laws. 2. 2.215 Protection of performers is provided in order to safeguard the interests of actors. musicians. information. Some countries also protect the interests of broadcasting organizations by preventing the distribution on or from their territory of any program-carrying signal emitted to or passing through a satellite. a large number of States have legislated in matters related to the Convention. deliver. sing. A duplicate of a phonogram is any article containing sounds taken directly or indirectly from a phonogram and which embodies all or a substantial part of the sounds fixed in that phonogram. the Rome Convention was an attempt to establish international regulations in a new field where few national laws existed. or other persons who act. 2. An increasing number of countries already protect some or all of these rights by appropriate rules. transmitted by any wireless means (including satellite transmissions) for public reception of sounds and of images and sounds. records or any other appropriate device permitting them to be perceived. . the right of producers of phonograms to authorize or prohibit reproduction of their phonograms and the import and distribution of unauthorized duplicates thereof. in other words. all kinds of artists’ presentations or the communication to the public of events. Broadcasting is usually understood as meaning telecommunication of sounds and/or images by means of radio waves for reception by the public at large. producers of phonograms and broadcasting organizations in relation to their activities in connection with the public use of authors’ works. The term “producer of phonograms” denotes a person who. in some enduring material form such as tapes. be interpreted as limiting or prejudicing the protection secured to authors or beneficiaries of other related rights under a national law or an international convention. reproduced or otherwise repeatedly communicated. phonogram or broadcast by sounds or images through a cable network to receivers not restricted to specific individuals belonging to a private group. first fixes the sounds of a performance or other sounds. however.48 WIPO Intellectual Property Handbook: Policy. This meant that most States would have to draft and enact laws before adhering to the Convention. the right of broadcasting organizations to authorize or prohibit rebroadcasting. Law and Use 2.213 Unlike most international conventions. or a legal entity which. performance. codified mainly within the framework of their copyright laws. Several countries also grant a sort of moral right to performers to protect them against distortion of their performances and grant them the right to claim the mention of their name in connection with their performances. play in or otherwise perform literary or artistic works. magnetophone cassettes and compact discs are duplicates of a phonogram.217 By first fixation of sounds is meant the original embodiment of sounds of a live performance. fixation and reproduction of their broadcasts. Since the adoption of the Convention in 196l. singers. and a number of others are considering such legislation. A phonogram is any exclusively aural fixation of sounds of a performance or of other sounds. First fixation of sounds is not to be confused with first publication of a phonogram.

This means that the owner of the copyright transfers it to another person or entity. deferred broadcast of a formerly recorded program transmitted or received earlier. Such an industry. who becomes the owner of the copyright. For example.Chapter 2 . Such exceptions are regulated by the national law.224 In some other countries. including the developing countries. The part played by the broadcasting organizations in developing countries should also not be forgotten. in the same position as an owner of copyright. . an assignment of copyright is not legally possible. In this context. By also protecting the producers of phonograms. the basis for setting up an industry in the tertiary sector of the economy is ensured. of course.219 Finally. due importance is attached to the artistic heritage. the licensee is. while guaranteeing the dissemination of national culture. copyright (with the exception of moral rights) may be assigned. can additionally constitute a substantial source of revenue for the country’s economy and.Fields of Intellectual Property Protection 49 2. it must be stated that since in the cultural life of countries.220 The owner of copyright in a work is generally. When such authorization or license extends to the full period of copyright and when such authorization or license extends to all the rights (except. the author of the work. 2. when a work is created by an author who is employed for the purpose of creating that work. the place occupied by works of folklore must be borne in mind. whoever may be the owner of the copyright. at least in the first instance.223 In many countries. can represent an inflow of foreign currency.218 Another notion. However. the moral rights) protected by copyright. is either simultaneous transmission of a broadcast of a program being received from another source. vis-à-vis third parties and for all practical purposes. or a new. the national law may provide that. then the employer. and the interests of the artists performing and thus perpetuating them must be safeguarded when use is made of their performances.221 There can be exceptions to this general principle.222 It is to be noted. 2. particularly in developing countries. Ownership of Copyright 2. the person who created the work. that is to say. that of rebroadcasting. is the owner of the copyright in the work. both within the country and throughout the world. very nearly the same practical effect as the effect of assignment can be achieved by licensing. in those cases where its activities extend beyond the country’s frontiers. nor that such organizations have a natural interest in the protection of their programs against rebroadcasting. reproduction and communication to the public. the protection of related rights affords rights to those who contribute to the interpretation and dissemination of that heritage. Licensing means that the owner of the copyright remains the owner but authorizes someone else to exercise all or some of his rights subject to possible limitations. 2. that the “moral rights” always belong to the author of the work. It is particularly important for some developing countries whose tradition is largely oral and where the author is often the performer as well. 2. not the author. 2. however.

even if no specific authorization of the act of recording has been given. It is to be noted that in some other countries such official texts are not excluded from copyright protection. he must refer to the law of that other country.” Such examples include reproduction of a work exclusively for the personal and private use of the person who makes the reproduction. Non-Material Works 2. the duration of copyright provided for by national law is the life of the author and not less than fifty years after the death of the author. Miscellaneous 2. the texts of laws and of decisions of courts and administrative bodies are excluded from copyright protection. 2. provided that the source of the quotation. during which the rights of the copyright owner exist. 2.227 In countries which are party to the Berne Convention. many national laws permit the broadcasting organization to make a temporary recording of the work for the purposes of broadcasting. works are excluded from protection if they are not fixed in some material form. If both countries are members of one of the international conventions on copyright.50 WIPO Intellectual Property Handbook: Policy. a tendency has emerged towards lengthening the term of protection. In some countries. For protection against such acts done in another country.231 In addition to exceptions based on the principle of “fair use” other exceptions are to be found in national laws and in the Berne Convention. including the name of the author. The period or duration continues until some time after the death of the author. It also safeguards the investments made in the production and dissemination of works. and in many other countries. another example is the making of quotations from a protected work. The law provides for a period of time. the practical problems arising from this geographical limitation are very much eased. In recent years.226 The period or duration of copyright begins with the creation of the work.225 Copyright does not continue indefinitely.230 In some countries. and exercises those rights in accordance with the public interest. provided that fair remuneration is paid to the owner of . in circumstances specified in the law. be done without the authorization of the copyright owner.229 Certain acts normally restricted by copyright may. Geographic 2. The owner of the copyright in a work is protected by the law of a country against acts restricted by copyright which are done in that country. the government is the owner of copyright in such works. Permitted Use 2. The purpose of this provision in the law is to enable the author’s successors to have economic benefits after the author’s death. is mentioned and that the extent of the quotation is compatible with fair practice. The laws of some countries permit the broadcasting of protected works without authorization. when the broadcasting of a work has been authorized. Law and Use Limitations on Copyright Protection Temporal 2. a duration. For example.228 The second limitation or exception to be examined is a geographical limitation. Some examples of such exceptions are described as “fair use.

is frequently called a system of “compulsory licenses. This element of commercial gain implies that piracy will often be carried out on an organized basis. 2. It is important to bear in mind.233 An essential part of piracy is that the unauthorized activity is carried on for commercial gain. films and videograms. Foremost amongst the latter developments have been: the development of the offset technique of printing and of duplicating and photocopying machines. which illegally reproduces a copyrighted work and distributes it to the public via a number of such sales outlets. the advent of the compact disc. The unauthorized copying of copyright materials for commercial purposes and the unauthorized commercial dealing in copied materials is known as “piracy. but also the subsequent sale or distribution of the illegally reproduced work. 2. This system. and to threaten the basis of the copyright system. however. widespread commercialization of the computer has added a further means of recording and communicating information. the advent of digital technology has had a tremendous impact on the creation. Piracy and Infringement 2.235 The first has been the advances in the means by which intellectual works may be communicated.232 The rights of an owner of copyright are infringed when one of the acts requiring authorization of the owner is done by someone else without his consent. The medium of the printed word has been supplemented progressively by media for communicating audio and visual recordings in the form of phonograms. that behind one such outlet will often lie a systematically organized illicit enterprise.” Incidence of Piracy 2. the invention of the magnetic tape. which will require some form of organized distribution network or contact with potential purchasers. often only the end of the chain of such a distribution network will be visible in the form of one sales outlet selling a pirated product.236 The copyright system has responded to these developments by progressively enlarging the subjects over which the creators of intellectual works are granted rights. have increased the scope for pirates to interfere in the control which an author exercises over the dissemination and use of his works by the public. two developments have occurred which have caused it to assume alarming proportions. 2.” Such licenses are called “compulsory” because they result from the operation of law and not from the exercise of the exclusive right of the copyright owner to authorize particular acts. under which a right to remuneration can be substituted for the exclusive right to authorize a particular act. particularly when addressing the question of the means of dealing effectively with piracy.237 Simultaneously with the advances in the means of communicating intellectual works have been significant advances in the means of reproducing tangible records of those works. To the consumer.234 While piracy is not a recent phenomenon. 2. since not only is the unauthorized reproduction of a work involved. Most recently.Chapter 2 .Fields of Intellectual Property Protection 51 copyright. and the development of higher quality and cheaper cassette recorders which enable not only the playing of . These advances. dissemination and use of works. music cassettes. however. Similarly.

on the other hand. the actors. the profits derived by pirates are not subject to tax collection. the making of the original recording by an author and his business partners and. as where infringers are obliged by court to cease the infringement and to undertake reparatory action by any appropriate means. Once a tangible record has been made of the film. effort.238 One consequence of these advances is the difference in cost between. skill and resources in the creation of new works. In the case of a film. for example. piracy threatens to stultify the evolution and development of national cultural identity which the copyright system is designed to promote. performer’s. and of the misappropriation of the economic returns to publishers and producers. This diversion of economic rewards from authors and their business partners to pirates removes the incentive to the investment of time. further records of the work can be reproduced with considerable ease and at little cost. Consumers are also disadvantaged in the long term by piracy as a result of the absence of remuneration given to authors and performers by pirates.240 Since piracy is a clandestine activity. finance the script writer and any other literary author involved. particularly if the record is contained in a videogram recording. Remedies Introduction 2. a producer must. Thus. investor’s and distributor’s possibility of obtaining a just moral and economic reward for their work and investment.242 Remedies for infringement of copyright or for violation of related rights consist of civil redress. works may be received.52 WIPO Intellectual Property Handbook: Policy. . principally visual. the cost of location and site facilities. the musical composer. Some laws also provide for penal remedies in the form of fines and/or imprisonment. thereby undermining the original author’s. and on Governmental Authorities 2. on the one hand. as the level of such sponsorship may in part be determined by reference to the contribution which is made to the government budget by taxation derived from the distribution or sale of works subject to copyright protection.241 Piracy can be seen to have detrimental effects. which has extensively enlarged the means by which films and other. rectification in the press or liability for damages. radio or gramophone records. any investment in the production of the original work. and the use of sophisticated visual and sound recording equipment. 2. however. Amongst the adverse consequences of this diminution in governmental revenue may be a reduction in the amount of government sponsorship available for the arts. therefore. Effects of Piracy on Consumers. the quality of reproductions made by pirates is often very inferior. the reproduction of such a recording by others. but also the recording of music from live performances. the support cast. the pirated copies are usually sold at reduced prices. and therefore does not need to recover the cost of. 2. Law and Use pre-recorded cassettes. on Creators and their Promoters.239 While consumers may sometimes see short-term benefits in the availability of cheaper works as a result of piracy. In consequence. and the invention of the video recorder. on each of the elements that make up the copyright system. advances in recording technology have produced the means whereby pirates can easily produce illegal versions of the original work. Since the pirate has not made. through his own and his partners investment. 2.

2. the order will be granted ex parte.Chapter 2 . The order has a number of features which make it a particularly appropriate remedy in the context of piracy: First. [1976] RPC 719). is an order granted by the court permitting the inspection of premises on which it is believed some activity is being carried on which infringes the copyright of the plaintiff. and precludes the defendant from destroying or removing vital evidence. Secondly. that is. since piracy often involves an international dimension.Fields of Intellectual Property Protection 53 Infringing copies. Anton Piller Orders 2. Thirdly. and damages to compensate the copyright owner for the depreciation caused by the infringement to the value of his copyright.244 In the first place. The essence of the order is thus that it takes the defendant by surprise. or any common source of supply for the outlets.243 The main remedies which are available to a copyright owner in respect of infringement in common-law jurisdictions are an injunction to restrain the continuation of the infringement. and the extent of sales which have taken place. sources of supply and customer lists) relating to the alleged infringement.245 These difficulties have accentuated the need for preliminary remedies which may be obtained speedily. - - .G. which will assist in turn in establishing the amount of damages to which he may be entitled. invoices. such as bills. 2. receipts resulting from infringement and any implement used for the same are usually subject to seizure. named after the case in which the English Court of Appeal sanctioned its use (Anton Piller K. The Anton Piller order. the effectiveness of these remedies may be jeopardized for a number of reasons. The copyright owner may be confronted with a situation in which it is possible to locate only a small proportion of these outlets. In the context of piracy. the terms on which the order is granted enable the copyright owner to inspect the premises of the defendant.246 Foremost among the new developments which have occurred in preliminary remedies has been the so-called Anton Piller order. In many common-law jurisdictions a number of developments have occurred in recent years in response to this need. the order for inspection will often be accompanied by an injunction restraining the defendant from altering or removing in any way articles or documents referred to in the order for inspection. and all documents (including business information. because it is often carried out as an organized activity. the organizer of the making and distribution of illegal reproductions may be using a large number of sales outlets of an impermanent nature. Furthermore. the copyright owner is given the means whereby he may be able to establish the source of supply of pirated works. by giving notice to the pirate or to those distributing the works which he has illegally reproduced. may precipitate the destruction of vital evidence required to indicate the source of supply and the extent of sales which have taken place. without prior warning being given to the defendant. and which will prevent the destruction of evidence and the removal of financial resources against which damages may be claimed. there is a risk that the financial resources and other assets of a pirate may be removed from the jurisdiction in which legal proceedings are commenced against him. the service of a writ commencing an action for infringement. 2. In addition. v Manufacturing Processes Ltd. on the application and in the presence alone of the copyright owner. without being able to prove any linkage between the outlets. which will assist in the collection of evidence against a pirate. By virtue of these terms. thereby depriving the copyright owner of the possibility of recovering damages.

usually a copyright owner will have to prove that there is clear evidence that the defendants have in their possession incriminating documents or material. Discovery Against Third Parties 2. should be noted. it will only be granted where it is essential that the plaintiff should have inspection so that justice can be done between the parties. give the defendant adequate opportunity of considering the order. the proprietors of a patent covering a chemical compound. [1974] AC 133) where the plaintiffs. Of course. pleading the privilege against self-incrimination. if a defendant were to refuse entry into his premises.251 A related but more effective procedure is to be found in Section 53 of the Indian Copyright Act 1957. it also has an application to copyright and could be of particular use to copyright owners who are unable to establish the identity of persons importing pirated works into a country. While this case was concerned with patents. since the importers were required under the customs regulations to fill in a form of entry specifying the name of the importer and a description of the goods. in particular. will be liable to furnish information concerning the wrongdoer to a plaintiff. shall not be imported. The customs authorities refused to disclose the identity of the importers on the ground that the information had been given to them in confidence. In order to meet this criterion. it was decided that an innocent third party. it may be necessary to pass legislation revoking the privilege against self-incrimination as a basis for refusing to comply with an Anton Piller order. 76). In this respect. v. and whose actions have not yet been judged. and not force entry into the defendant’s premises against his will. it may be required that. In order to overcome the effects of this decision. Commissioners of Customs and Excise ([1972] RPC 743. such as the customs authorities. this would cause extremely adverse inferences to be drawn against him at the subsequent trial. Two safeguards. would infringe copyright. Nevertheless. a copyright owner be attended by his lawyer. if made in India. This decision arose in the English case of Norwich Pharmacal Co.247 The Anton Piller order can undoubtedly constitute an important weapon in the armory against piracy. it may finally be noted that the effectiveness of the orders was brought into question in one case when a defendant. as was done in the Supreme Court Act of 1981 in the United Kingdom. Law and Use 2. 2. are adequately protected. Since it is granted on an ex parte basis. This information was in the possession of the Commissioners of Customs and Excise. v Video Information Center [1981] 2 All E.R. care needs to be exercised to ensure that the rights of persons against whom it is granted. The section also authorizes the Registrar to enter any ship. 2. successfully applied to discharge orders on the ground that they would expose him to a real risk of prosecution for a criminal offense (Rank Film Distributors Ltd. The use of the section in a case involving the transportation of pirated audio . First.249 In relation to Anton Piller orders. which have been required by courts in jurisdictions where it is available. 2. dock or premises for the purpose of examining allegedly infringing works. in executing the order.250 In certain common-law jurisdictions it has been decided that an innocent third party. is liable to furnish a plaintiff with evidence in his possession relevant to the prosecution of an action by the plaintiff against the wrongdoer. This provision enables the Registrar of Copyrights to order that copies made out of India of a work which. however. discovered that various persons were importing the compound into the country in contravention of their patent. who becomes caught up in the wrongdoings of another. that the circumstances are such that there is a real possibility or grave danger that the incriminating materials will be destroyed or hidden if the defendant is forewarned. who inadvertently becomes involved in the wrongdoing of another.248 The second safeguard which is often required is proper respect for the defendant’s rights in the execution of the order.54 WIPO Intellectual Property Handbook: Policy. but were unable to establish the identity of these persons. and that the potential or actual damage to the plaintiff as a result of the defendant’s alleged wrongdoings is very serious.

A difficulty often encountered in obtaining a satisfactory judgment in damages is the production of evidence as to the extent of sales which have taken place and thus as to the extent of damage which has been caused to the plaintiff’s copyright. such as the Anton Piller order.256 The two usual remedies which are available for copyright owners in common-law jurisdictions following the final trial of an infringement action are a perpetual injunction and damages. namely.Fields of Intellectual Property Protection 55 cassettes over Indian territory was approved by the Indian Supreme Court in Gramophone Company of India Ltd. In many common-law jurisdictions. . Final Remedies 2. 2. he will be deprived of a portion of his potential market. it will be important for a copyright owner to take swift action in seeking to prevent its continuation. In order to make the injunction effective. In order to overcome the delays and the lengthy proceedings which this standard of proof involved. it is often coupled with an order for the delivery by the infringer of all infringing copies of the copyright work. each party could be adequately compensated in damages for the temporary impairment of his right were he to be unsuccessful at the interlocutory stage. which are then subject to destruction so as to ensure that they cannot be re-used or sold. 2. Panday ([1984] 2 SCC 534). that is. many jurisdictions have now required that a plaintiff establish only that there is a “serious question” to be tried. It is for this reason that the recent developments in preliminary remedies.255 The adoption of this approach to interlocutory proceedings assists in avoiding excessive delays in obtaining relief during the period which is most important for the copyright owner. which are aimed at enabling a plaintiff to acquire evidence of infringement. in particular.253 One of the difficulties which has been experienced with interlocutory proceedings is that they have tended to become themselves lengthy inquiries involving rather full consideration of the facts of the case.252 In order to minimize the damage being inflicted by piracy. this has caused a reassessment of the principles on which interlocutory relief is granted and.Chapter 2 . are particularly important. Thereafter.254 Previously. the period immediately following the initial publication and marketing of his work. v.257 The object of an award of damages to a copyright owner is to restore the copyright owner to the position he would have been in had his copyright not been infringed. and whether. The perpetual injunction is granted in order to prevent any further repetition of the infringing action. the merits of the legal issues involved in the case need only be considered at the interlocutory stage to the point where the court is satisfied that the plaintiff’s claim for infringement is not frivolous. 2. 2. and later prove to be successful at the trial. with the result that their effectiveness as a means of obtaining temporary relief is prejudiced. of the standard of proof which a plaintiff is required to establish in order to obtain interlocutory relief. thus preventing irreparable damage from occurring to the plaintiff’s rights. a plaintiff was required to establish a prima facie case that his copyright was being infringed. In other words. The aim of the interlocutory injunction is to meet this need by granting speedy and temporary relief during the period before a full trial of an infringement action takes place. Interlocutory Injunctions 2. and thus of the capacity to recover the economic reward for his creativity or investment. For as long as piracy continues. to establish on the balance of probabilities that his case for infringement could be defended. in particular. the decision as to whether an injunction should be granted is taken on the basis of the factual circumstances of the case.

medium and large. Handicrafts. publishing. Tradition can be an important source of creativity and innovation for indigenous. with no sharing of economic benefits. degrading and/or culturally offensive. use of traditional cultural expressions in ways that are insulting.262 The relationship between tradition. create wealth using the forms and materials of traditional cultures – local cooperatives that produce and market handmade crafts. and entertainment conglomerates that employ various forms of traditional representations for motion pictures. local and other cultural communities. for instance. industrial textile manufacturers that employ traditional designs. amusement theme parks and children’s toys.261 Cultural heritage is also a source of inspiration and creativity for parties outside the traditional or customary context. fashion. Intellectual Property and Traditional Cultural Expressions Introduction 2. is the provision in some jurisdictions for additional damages in the case of a flagrant infringement of copyright. The mere re-creation and replication of past traditions is not necessarily the best way of preserving identity and improving the economic situation of indigenous. and that he has obtained a pecuniary advantage in excess of the damages that he would otherwise have to pay.56 WIPO Intellectual Property Handbook: Policy. 2. 2. Many businesses today. modernity and the marketplace may not. design and other cultural industries. In particular.258 Of particular relevance to piracy. promoters of tourism. while it may be considered that tradition is only about imitation and reproduction. always be a happy one. 2. Before an award of additional damages can be made in such jurisdictions. however.259 The cultural heritage of a community or nation lies at the heart of its identity and links its past with its present and future. pharmaceutical manufacturers who use indigenous knowledge of healing plants. Law and Use 2. 2. however. reproduction and subsequent commercialization of traditional cultural expressions. small. exemplify the ability of many tradition-bearing communities to combine tradition with the influences and cultural exchanges characteristic of modernity for the purpose of maintaining their identity and improving their social and economic circumstances.260 So. local and other cultural communities. such as the entertainment. Cultural heritage is also “living” – it is constantly recreated as traditional artists and practitioners bring fresh perspectives and experiences to their work. producers of audio recordings of traditional music. Indigenous and traditional communities express concerns that the distinct and diverse qualities of the world’s multiple cultural communities are threatened in the face of uniformity brought on by new technologies and the globalization of culture and commerce. .263 It is also argued by some that expressions of traditional cultures and traditional forms of creativity and innovation are not adequately protected by or in relation to existing intellectual property laws. Indigenous and traditional communities refer inter alia to the: unauthorized adaptation. it is necessary to establish that the infringer’s conduct has been deliberate and calculated. it is also about innovation and creation within the traditional framework.

trends and experiences in the protection of traditional cultural expressions. the reputation or distinctive character associated with them.Fields of Intellectual Property Protection 57 - appropriation of the reputation or distinctive character of traditional cultural expressions in ways that evoke an authentic traditional product. related rights.268 The meaning and scope of terms such as “traditional cultural expressions.266 The protection of traditional cultural expressions is complex and raises fundamental policy and legal questions. may be protected by intellectual property rights)? What is the relationship between intellectual property “protection" and "preservation”/“safeguarding” in the cultural heritage sense? Which intellectual property policies best serve cultural diversity and cultural pluralism. trademarks. and/or. by use of misleading or false indications as to authenticity or origin. such as a new musical work or design. industrial designs. To whom. and/or. This section will. or adoption of their methods of manufacture and “style”. possible future directions of WIPO’s work in this area. although other intellectual property rights will also be briefly referred to where relevant.” otherwise known as “expressions of folklore. for the protection of traditional cultural expressions. failure to acknowledge the source of a tradition-based creation or innovation.Chapter 2 . previous and current activities of the World Intellectual Property Organization. however. focus more on copyright and related rights. does a nation’s cultural heritage “belong” – by whom and in which circumstances may it be used as a source of creativity (the results of which. whether copyright. 2. 2. patents or unfair competition. economic development? 2. which intellectual property policies and mechanisms best foster creativity. Describing “traditional cultural expressions" 2.264 It can be seen from these examples that the protection of expressions of traditional cultures may refer to protection of: the expressions themselves. therefore. and.265 All branches and forms of intellectual property are therefore relevant. the intellectual property-related needs and strategies of Indigenous peoples and local communities. for example). - 2. conceptual and policy questions.267 This section will explore these questions in greater detail with reference to: a working description of “traditional cultural expressions”. if anyone. as a component of sustainable development? This last question is perhaps the key – how best can intellectual property be used as a tool for tradition-based creation and innovation and. their method of manufacture (in the case of a handicraft. including tradition-based creativity.” “indigenous culture and intellectual property” and “intangible . a particular challenge for societies with both Indigenous and immigrant communities? How best can the needs and expectations of Indigenous and traditional communities be met? And. and.

beliefs. national and international levels. Thus. dance. Kyrgyzstan. There are no widely-accepted definitions of these terms. old).271 Culture is in a permanent process of production. most usually. 2. a combination of the two. it is cumulative and innovative. “Traditional cultural expressions” (or TCEs) is used as a neutral working term in this section because some communities have expressed reservations about the negative connotations of the word “folklore. as part of the “public domain. the Republic of Korea. Tangible and Intangible Expressions of Culture 2. Law and Use and tangible cultural heritage” (which is perhaps the most comprehensive term) have been discussed at local. song. They potentially cover an enormous variety of customs. 2. chant) elements of folklore that cannot be separated. Japan. .272 This is relevant from an intellectual property perspective because. to the extent that the notion of authorship is relevant at all. Belgium. but traditional knowledge in this narrower sense is conceptually separate and its protection raises distinct policy questions.” TCEs/expressions of folklore may often be associated with traditional knowledge and know-how of a technical nature (such as ecological or medical knowledge). instruments. processes of production and spaces that originate in many communities throughout the world. dance and make disguising costumes.” This is the approach followed in the national laws of States such as Australia. literary and artistic productions created by current generations of society and based upon or derived from pre-existing traditional culture or folklore are more easily protected as intellectual property. underlying traditional culture of a community (which may be referred to as traditional culture or folklore stricto sensu).269 The terms “traditional cultural expressions” and “expressions of folklore” are used synonymously in international policy discussions concerning this area of intellectual property. play music. from the perspective of the intellectual property system. Colombia. tangible or. 2. Honduras. the Czech Republic. the practice of “mummering” in Newfoundland during the Christmas season when villagers act out elaborate charades. traditions. and the Mardi Gras “Indians” of New Orleans who exhibit a true example of tangible (costumes. identify or are associated with an indigenous or traditional people and may be made or practised in traditional ways. as noted above. floats) and intangible (music. the Netherlands. the Russian Federation and Viet Nam. the term “traditional” does not mean “old” but rather that the cultural expressions derive from or are based upon tradition. knowledge.273 Pre-existing traditional culture is generally trans-generational (that is. Italy. Use of the Term “Traditional” 2. Examples from North America of TCEs that combine tangible and intangible elements include African-American quilts depicting Bible stories in appliquéd designs. forms of artistic expression. Pre-existing traditional culture as such and particular expressions thereof are generally not protected by current copyright laws and are treated. products.58 WIPO Intellectual Property Handbook: Policy. eat. collectively “owned” by one or more groups or communities and is likely to be of anonymous origin. unlike the pre-existing. The present chapter does not directly address the protection of technical traditional knowledge. Canada.270 “Expressions of” traditional culture (or “expressions of” folklore) may be either intangible. since what is considered “cultural heritage” or “traditional cultural expressions” depends upon the context and the purpose for which the definition is developed. drink.

signs. expressions by actions. 2. to name only a few examples. mosaic. whether or not reduced to a material form. musical expressions. such as those of Hungary and Tunisia. in particular: (a) (b) (c) (d) verbal expressions. The Tunis Model Law of 1976 similarly protects. pottery. art. Contemporary. in particular. architectural forms. basket weaving. (ii) (iii) (iv) crafts. handicrafts. such as: (i) productions of folk art. words. carpet and jewelry designs and forms of architecture. described as “works of national folklore. folk poetry and riddles.” whereas folklore itself. drawings. carvings. Such a contemporary production may include a new interpretation. colorization and the like. such as folk dances.” .Fields of Intellectual Property Protection 59 2. such as folk tales. musical instruments. performances. woodwork. needlework. sculptures. tradition-based expressions and representations of traditional cultures are generally protected by existing copyright for which they are sufficiently “original. recognize this distinction and explicitly provide copyright protection for folklore-based literary and artistic works. stories. A Working Description of Traditional Cultural Expressions 2. arrangement. musical instruments.” The law makes no distinction based on “authenticity” or the identity of the author – that is. or even their “re-packaging” in the form of digital enhancement. derivative works which include “works derived from national folklore.Chapter 2 . derived from or inspired by traditional culture that incorporates new elements or expression is a “new” work in respect of which there is generally a living and identifiable creator or creators.276 Cultural expressions include music. such as folk songs and instrumental music. paintings. metalware. adaptation or collection of pre-existing cultural heritage and expressions in the public domain. The description of “expressions of folklore” in the Model Provisions of 1982 is a useful starting point for the following: “‘traditional cultural expressions’ means productions consisting of characteristic elements of the traditional artistic heritage developed and maintained by a community of [name of country] or by individuals reflecting the traditional artistic expectations of such a community. symbols and indications. names and insignia. This distinction is also implicit in the 1982 Model Provisions (see below). textiles. and tangible expressions.275 Several national copyright laws.274 On the other hand. a contemporary literary and artistic production based upon. the originality requirement of copyright could be met by an author who is not a member of the relevant cultural community in which the tradition originated. costumes.” is accorded a sui generis (meaning “special” or “of its own kind”) type of copyright protection. textile. plays and artistic forms or rituals. as original copyright works. terracotta. carpets. jewelry.

according to the intentions of the revision Conference. implies the possibility of granting protection for TCEs. (b) Countries of the Union which make such designation under the terms of this provision shall notify the Director General [of WIPO] by means of a written declaration giving full information concerning the authority thus designated. The Tunis Model Law on Copyright for Developing Countries 2.279 This Article. Scientific and Cultural Organization (Unesco). operational and administrative needs and issues.278 The 1967 Stockholm Diplomatic Conference for Revision of the Berne Convention for the Protection of Literary and Artistic Works made an attempt to introduce copyright protection for folklore at the international level. Law and Use Previous and Current Activities of WIPO 2. it shall be a matter for legislation in that country to designate the competent authority which shall represent the author and shall be entitled to protect and enforce his rights in the countries of the Union.283 It had been agreed beforehand by a Working Group convened by WIPO and Unesco that adequate legal protection of folklore was desirable and could be promoted at the national level by . has made the designation referred to. conceptual. Such works need not be fixed in material form in order to receive protection.280 To cater for the specific needs of developing countries and to facilitate the access of those countries to foreign works protected by copyright while ensuring appropriate international protection of their own works. Only one country. the Tunis Model Law on Copyright for Developing Countries was adopted by the Committee of Governmental Experts convened by the Tunisian Government in Tunis. the Berne Convention was revised in 1971. Provision of International Protection for “unpublished works” in the Berne Convention 2. The Director General shall at once communicate this declaration to all other countries of the Union. The Tunis Model Law provides specific protection for works of national folklore. which is without limitation in time. several of which were undertaken in cooperation with the United Nations Educational.277 Previous activities of WIPO in the field of intellectual property and TCEs. but where there is every ground to presume that he is a national of a country of the Union. with the assistance of WIPO and Unesco. Article 15(4) of the Stockholm (1967) and Paris (1971) Acts of the Berne Convention contains the following provision: “(4)(a) In the case of unpublished works where the identity of the author is unknown. 2.” 2. Its inclusion in the Berne Convention responds to calls made at that time for specific international protection of TCEs. 2. have over a period of more than 30 years identified and sought to address legal. in a Committee of Governmental Experts. The Model Provisions 2. It was deemed appropriate to provide States with a text of a model law to assist States in conforming to the Convention’s rules in their national laws. in 1976. As a result.281 Thus.60 WIPO Intellectual Property Handbook: Policy.282 Model Provisions for National Laws on the Protection of Expressions of Folklore Against Illicit Exploitation and Other Prejudicial Actions were adopted in 1982 under the auspices of WIPO and Unesco. India.

“‘performers’ means actors. Chapter 5). WIPO and Unesco acted accordingly when they jointly convened a Group of Experts on the International Protection of Expressions of Folklore by Intellectual Property. play in. the WPPT has widened the definition. sing. that expressions of folklore constituting manifestations of intellectual creativity deserved to be protected in a manner inspired by the protection provided for intellectual productions.Chapter 2 . considering that only a recommendation. 1961 (the Rome Convention). at the meeting which adopted the Model Provisions. the great majority of the participants considered it premature to establish an international treaty in view of insufficient national experience. Two main problems were identified by the Group of Experts: these were the lack of appropriate sources for the identification of the expressions of folklore to be protected. and other persons who act. dancers. musicians.287 The WIPO Performances and Phonograms Treaty (the WPPT).284 The Model Provisions were drafted in response to concerns that expressions of folklore were susceptible to various forms of illicit exploitation and prejudicial actions. Since expressions of folklore do not correspond to the concept of literary and artistic works proper. deliver. The Adoption of the WIPO Performances and Phonograms Treaty (the WPPT) 2. some have expressed the need for their improvement and updating.285 Several countries have used the Model Provisions as a basis for national legal regimes for the protection of folklore. agreed with the Group’s findings. Such model provisions were to be elaborated so as to be applicable both in countries where no relevant legislation was in force and in those where existing legislation could be further developed. rather than an international treaty. that any abuse of a commercial or other nature or any distortion of expressions of folklore was prejudicial to the cultural and economic interests of a nation. singers. These provisions for national laws were to pave the way for subregional. the Expert Committee believed that the dissemination of folklore might lead to improper exploitation of the cultural heritage of a nation.286 A number of participants stressed. Attempts to Establish an International Treaty 2. which was adopted in December 1996 and came into force on May 20. provides that the definition of “performer” for the purposes of the Treaty includes the performer of an expression of folklore. or otherwise perform literary or artistic works” (emphasis added). at their joint sessions in Paris in June 1985. This addressed a problem in respect of the key notion of “performers” (and the notion of “performances” following indirectly from the notion of “performers”) as determined in the International Convention for the Protection of Performers. They were also to allow for protection by means of copyright and neighboring rights where possible. While there was a general recognition of the need for international protection of expressions of folklore. The Executive Committee of the Berne Convention and the Intergovernmental Committee of the Universal Copyright Convention. particularly in the implementation of the Model Provisions. as stated in the Preamble to the Model Provisions. that international measures would be indispensable for extending the protection of expressions of folklore of a given country beyond the borders of the country concerned. More specifically. declaim. which met in December 1984.Fields of Intellectual Property Protection 61 model provisions for legislation. 2. . However. but in several countries of a region. would be realistic at that stage. 2. maintenance and dissemination. 2002 (see below. Producers of Phonograms and Broadcasting Organizations. regional and international protection of creations of folklore. Under Article 3(a) of the Rome Convention. and that the protection of folklore had become indispensable as a means of promoting its further development. and the lack of workable mechanisms for settling the questions of expressions of folklore that can be found not only in one country.

Law and Use 2.289 Pursuant to the recommendation made during the 1996 Diplomatic Conference.288 In the Diplomatic Conference at which the WPPT. The Forum adopted a “Plan of Action” which identified inter alia certain needs and issues: these were the need for a new international standard for the legal protection of folklore. Traditional Knowledge and Folklore. academics.290 The Plan of Action also suggested that “regional consultative fora should take place…. Traditional Knowledge and Folklore 2. intellectual property aspects of folklore. in late 2000. WIPO and Unesco organized four Regional Consultations on the Protection of Expressions of Folklore in 1999. the WIPOUnesco World Forum on the Protection of Folklore was held in Phuket. WIPO-Unesco Regional Consultations on the Protection of Expressions of Folklore 2. Each of the regional consultations adopted resolutions or recommendations which identify intellectual property needs and issues. Three of the four regional consultations recommended the establishment within WIPO of a separate committee on folklore and traditional knowledge to facilitate future work in these areas. For the purpose of these missions.” in order to make progress towards addressing these needs and issues. governmental representatives. and the importance of striking a balance between the community owning the folklore and the users of expressions of folklore. 2. related to expressions of folklore. Indigenous and local communities. WIPO conducted fact-finding missions (“FFMs”) in 28 countries to identify the needs and expectations of traditional knowledge holders relating to intellectual property.291 During 1998 and 1999.” WIPO-Unesco World Forum on the Protection of Folklore 2. Thailand. as well as the WIPO Copyright Treaty (the WCT) were adopted in December 1996. the Member States of WIPO established an Intergovernmental Committee on Intellectual Property and Genetic Resources. and the harmonization of the different regional interests. and following certain other developments in the area of genetic resources. 2. the WIPO Committee of Experts on a Possible Protocol to the Berne Convention and the Committee of Experts on a Possible Instrument for the Protection of the Rights of Performers and Producers of Phonograms recommended that “provision should be made for the organization of an international forum in order to explore issues concerning the preservation and protection of expressions of folklore. .293 Pursuant to the suggestion included in the Plan of Action adopted at the WIPO-Unesco World Forum on the Protection of Folklore.294 Accordingly. non-governmental organizations. “traditional knowledge” included TCEs as a specific form. The WIPO Intergovernmental Committee on Intellectual Property and Genetic Resources. Much of the information obtained related either directly or indirectly to TCEs. 1997. as well as proposals for future work. researchers and private sector representatives were among the groups of persons consulted on these missions.292 The results of the missions have been published by WIPO in a report entitled “Intellectual Property Needs and Expectations of Traditional Knowledge Holders: WIPO Report on Fact-finding Missions (1998-1999)” (the “FFM Report”). WIPO Fact-finding Missions 2. in April 1997.62 WIPO Intellectual Property Handbook: Policy.

Fields of Intellectual Property Protection 63 2. Tunisia.297 In the course of the extensive fact-finding and consultations undertaken by WIPO. the Russian Federation. and presentations made during Committee sessions. depending on their assessment of their overall objectives and interests.295 The Committee is making significant progress in articulating in intellectual property terms the needs and expectations of Indigenous peoples and traditional communities in relation to their TCEs. Indigenous peoples and traditional communities have expressed various needs related to intellectual property. uses which may need to be prevented could include. Panama.Chapter 2 . 2. uses that falsely suggest a connection with a community. marking out a conceptual framework within which to view those needs and expectations. defamatory or fallacious uses. including culturally offensive or demeaning use. libellous. and to the integrity of their cultural heritage and cultural expressions. for example. Nigeria. The Committee has received detailed briefings by New Zealand. In addition. and uses of sacred and secret TCEs. intellectual property protection to prevent unwanted use by others: some communities may wish to claim intellectual property in order to be able to actively exercise intellectual property rights that prevent the use and commercialization of their cultural heritage and TCEs by others.296 The Committee has considered detailed Secretariat analysis of the use of existing intellectual property and sui generis approaches for the legal protection of TCEs. One of these. such as: intellectual property protection to support economic development: some communities wish to claim and exercise intellectual property in their tradition-based creations and innovations to enable them to exploit their creations and innovations commercially as a contribution to their economic development. Specific defensive protection mechanisms may also be built into national or regional intellectual property laws: for instance. the United States of America and the Andean Community. which entails the use of defensive mechanisms to block or pre-empt third parties’ intellectual property rights that are considered prejudicial to the community’s interests. . - - This latter kind of strategy is distinct from positive intellectual property protection. Intellectual Property Needs and Expectations of Indigenous and Traditional Communities 2. and a set of case studies. specific measures to prevent the acquisition of trademark rights over Indigenous or traditional symbols have been already adopted by New Zealand. entitled “Minding Culture – Case Studies on Intellectual Property and Traditional Cultural Expressions. and the Philippines. the United States of America and the Secretariat of the Pacific Community on their recent legislative experiences with the legal protection of TCEs. derogatory. surveyed through a questionnaire issued by WIPO in 2001. This analysis was based on the national experiences of 64 Member States. Indonesia. prevention of others acquiring intellectual property rights over TCEs: communities are also concerned to prevent others from gaining or maintaining intellectual property over derivations and adaptations of TCEs and representations. WIPO has also published a study of practical experiences in India. in which a community actively obtains and exercises intellectual property rights (the two first cases given above).” comprises practical studies of actual cases in which Indigenous Australians have sought to use intellectual property to protect their TCEs. Both defensive and positive protection strategies may be used in parallel by the one community. and methodically developing policy options and practical tools in response to them.

labelling and other consumer protection laws may be particularly relevant and valuable. Trends and Experiences in the Protection of TCEs 2. 2. largely within their national copyright legislation. establishes sui generis protection for TCEs. Examples would include Burkina Faso.64 WIPO Intellectual Property Handbook: Policy. when it comes to implementation. States have cited a variety of legal. based upon a registration requirement. Examples of these countries would include Barbados. the provisions are based upon the Tunis Model Law of 1976 or the 1982 Model Provisions. for the handicrafts and other creations of its Indigenous peoples. such as Panama and the Philippines. one single form of protection for TCEs is unlikely to meet all the needs of a traditional community: it may need to use a range of positive and defensive legal tools to achieve its chosen objectives in protecting and preserving its traditional culture. Namibia. but this can mask a wide range of potential objectives. Togo. Kenya. 2. and most of the usual rules of copyright apply to them. Sri Lanka. the Secretariat of the Pacific Community has developed a sui generis model law for the Pacific Island countries. and Viet Nam. Nigeria. Another group of States have included within their copyright legislation provisions specifically designed for expressions of folklore. as some of them are perhaps more concerned with preservation and safeguarding than intellectual property protection. especially since concerns about commercial misuse of TCEs often arise from the perception that they are being used to create a misleading impression that a product is “authentic” or produced or endorsed by a traditional community.300 Several States already provide specific legal protection for TCEs as intellectual property in their national laws or regulations. Unfair competition law and marketing. Senegal. taking into account the 1982 Model Provisions as a starting point. Law and Use 2. infrastructural and other operational difficulties they experience in implementing workable and effective legislative provisions at the national level. Panama’s Law of 2000 provides perpetual and collective protection of the intellectual property type. It is important to be clear to what extent and in which cases intellectual property protection is relevant to meeting the needs of Indigenous and traditional communities. Ghana.302 A third category comprises States that provide protection for expressions of folklore in distinct sui generis legislation. TCEs are simply referred to as a form of copyright work. More recently. Indonesia and the Islamic Republic of Iran. The Bangui Agreement of the African Intellectual Property Organization (OAPI). although the modalities of protection may differ. 2. it appears from the results of the WIPO questionnaire that there are few countries in which such provisions are actively utilized or effective in practice. The term “protection” is widely used. . Mozambique.303 However. Mexico.301 In some cases.298 The work of the WIPO Intergovernmental Committee has highlighted the need to clarify and articulate the distinct notions of “intellectual property protection” and “preservation/safeguarding” when applied to cultural heritage. In most of these cases. 2. as revised in 1999. conceptual. Some have argued that it is necessary to provide States and regional organizations with updated and improved guidelines or model provisions for national laws. even in those countries which provide specific legal protection for TCEs. States have requested enhanced legal-technical cooperation in this respect.299 Generally speaking. There appears to be little practical experience with the implementation of existing systems and measures which countries have established in law. the United Republic of Tanzania. Côte d’Ivoire.

carpets. such as trademarks. it will be possible to develop a suitable framework for international protection. Canada. as mentioned earlier. the United States of America has. . The current balance of interests in the intellectual property system means that members of cultural communities as well as others are free to create and innovate on the basis of their cultural traditions. the external appearance of national outer clothes. for the labels attached to the carpets claimed that the carpets had been designed by Aboriginal artists and that royalties were paid to the artists on every carpet sold. works that have been passed on only in oral form) and special remedies for copyright infringement that is also culturally offensive. head-dresses.305 For example. and it may be that eventually. current copyright law appears able to protect contemporary tradition-based forms of creativity. Intellectual property protection provides incentives for the creation and dissemination of new intellectual creations. national children’s cots. 2. In awarding damages to the plaintiffs.Chapter 2 . 2. as well as meeting certain objectives of cultural heritage and cultural exchange policies. in the “public domain. like bracelets. that existing and conventional intellectual property systems are adequate for the protection of TCEs. other forms of intellectual property are relevant too. to ensure the authenticity and quality of Indigenous arts and crafts. Australia. crib-cradles and table wares.307 Some of these States consider that some adaptations to existing rights and/or some specific measures within the intellectual property system may be necessary and desirable to meet particular needs – for instance. based on creation stories. established a database that may be searched and thus prevent the registration of a mark confusingly similar to an official insignia of a Federally and staterecognized Native American tribe.306 Apart from copyright and related rights. national dwellings and their structural elements. a traditional craftsman has received industrial design protection for his tradition-based silver tea-sets. geographical indications and unfair competition. if their full potential is explored. In New Zealand a recent amendment to the Trade Marks Act allows the Commissioner of Trade Marks to refuse to register a trademark where its use or registration would be likely to offend a significant section of the community. as well as women’s apparel accessories. The designations containing elements of Kazakh ornament are registered and protected as trademarks. for example. including Maori.308 WIPO’s fact-finding.” 2. are protected as industrial designs. particularly certification marks. 2. the Australian case Milpurrurru v Indofurn Pty Ltd (1995) 30 IPR 209 involved the importation into Australia of carpets manufactured in Viet Nam which reproduced (without permission) either all or parts of well-known works. Similar calls have been made within the context of the WIPO Intergovernmental Committee. other consultations and the 2001 questionnaire also evidenced a strong demand from among many countries for the effective international protection of TCEs. created by Indigenous artists.304 Many States argue. as noted above. from a strictly intellectual property perspective. On the other hand. the judgement recognized the concept of “cultural harm” and awarded collective damages to all the artists to distribute according to their cultural practices. pre-existing cultural heritage remains. For example. including tradition-based creations. at least those that are fixed in jurisdictions requiring fixation. New Zealand and Portugal have provided examples of the use of trademarks.Fields of Intellectual Property Protection 65 2. This contributes to their economic development. In Kazakhstan. In China. copyright protection for collective works or works that have not been fixed (for example. Indeed. and acquire and benefit from any intellectual property that may subsist in the creations and innovations. graphic works and other literary and artistic works through copyright and performers’ rights. There are many examples of traditional communities successfully protecting songs. The artists successfully claimed infringement of copyright as well as unfair trade practices. decorations of saddles. and that no special systems are needed. on the basis of successful national and regional experiences and a consolidation of approaches. however. for example. In the trademark area.

Musical traditions such as jazz emerged in the early twentieth century in cultural crossroads such as New Orleans. contours and boundaries of the public domain. Their TCEs were never protected and are thus not part of a “public domain. combining elements of African-American. They argue that the “public domain” is purely a construct of intellectual property systems and that it does not take into account private domains established by Indigenous and customary legal systems. Is it intended to control or require compensation for all these kinds of flows and exchanges? 2. and. and no intellectual property-type property rights over the “public domain” are warranted or necessary. those TCEs which would not qualify for protection by current intellectual property. 2. Rock music evolved from blues.310 A key policy question is whether limiting intellectual property protection to contemporary. Almost everything created has cultural and .to the contrary. 2. tradition-based cultural expressions. Should all historic materials be in the public domain and be denied protection simply because they are not recent enough? Merely providing intellectual property protection for contemporary. Some adaptations or enhancements of existing intellectual property systems may be necessary to meet particular needs. valuing or rewarding imitation.” Canada has expressed the similar view that “copyright encourages members of a community to keep alive ‘pre-existing cultural heritage’ by providing individuals of the community with copyright protection when they use various expressions of ‘pre-existing cultural heritage’ in their present-day creations or works. sui generis measures and systems are required. A robust public domain allows too for the kind of cultural flows and exchanges that have forever marked music and other cultural forms. An integral part of developing an appropriate policy framework within which to view intellectual property protection of TCEs is a clearer understanding of the role. as conventional intellectual property systems are inadequate. cultural expressions and practices from “dominant cultures” continue to be absorbed and popularized in less dominant cultures. Afro-Caribbean and European cultures.” According to these views.312 On the other hand.309 National and regional experiences appear to reflect two broad approaches to the protection of TCEs: on the one hand. on the other hand. Law and Use Conceptual and Policy Questions 2.66 WIPO Intellectual Property Handbook: Policy. Does it offer the greatest opportunities for creativity and economic development? Does it best serve cultural diversity and cultural preservation? Does it address the concerns of the custodians of traditional cultures? These questions turn on whether intellectual property protection should be available for TCEs that are now in the so-called “public domain” — in other words.” Furthermore. it allows for new creations derived from or inspired by it at the hands of contemporary artists. it is argued. neither members of the relevant cultural communities nor the cultural industries would be able to create and innovate based on cultural heritage if private property rights were to be established over it. as the European Community and its Member States have stated: “the fact that folklore for the most part is in the public domain does not hamper its development .311 For example. property rights over the “public domain” are appropriate and. So too. TCE holders and practitioners challenge the “public domain” status of traditional cultures under intellectual property law. tradition-based cultural expressions adequately meets the identified cultural and intellectual property policy objectives. they are not necessarily mutually exclusive. revision and improvisation. they question whether the “public domain” status of cultural heritage offers the greatest opportunities for creation and development. existing and conventional intellectual property systems are adequate because they protect contemporary. While there is a tendency to characterize these as opposing viewpoints. tradition-based cultural expressions is an inappropriate “survival of the fittest” approach that does not best serve cultural diversity and cultural preservation. and a comprehensive solution may draw on both points of view.

These options. which became so famous that it was copied and counterfeited. Indian craftsmen used to engrave their signatures on their artistic creations before sending them to Iran. With the flourishing trade of the Middle Ages. should Member States so wish.313 Based on the results of the 2001 questionnaire. including the FORTIS brand. Often without any apparent differences for the consumer. to assist them in managing the intellectual property aspects of their cultural heritage collections. Industrialization and the growth of the system of the market-oriented economy allow competing manufacturers and traders to offer consumers a variety of goods in the same category. and. and they have since become a key factor in the modern world of international trade and market-oriented economies. Recent and Possible Future Developments 2.000 years ago and at one time about a thousand different Roman pottery marks were in use. however. The Secretariat is also undertaking case studies on the relationship between customary laws and protocols and conventional intellectual property systems in so far as TCE protection is concerned. 2. guidelines or model provisions for national and regional laws.316 Trademarks started to play an important role with industrialization.314 At a policy level. there were already creative entrepreneurs who marketed their goods beyond their localities and sometimes over considerable distances. policy makers. Even at times when people either prepared what they needed themselves or. price and . reports and other materials considered by the WIPO Intergovernmental Committee makes it possible to begin to distill and annotate the various policy and legislative options available to States and regional organizations wishing to offer enhanced protection of TCEs under adapted or expanded conventional intellectual property systems and/or under stand-alone sui generis systems. the use of signs to distinguish the goods of merchants and manufacturers likewise expanded several hundred years ago. communities and other stakeholders on the effective protection of TCEs. codes of conduct and guidelines for use by cultural heritage archives. the development of model contracts. could. In addition. more usually. and systems should be established that yield benefits to cultural communities from all creations and innovations that draw upon tradition. they do generally differ in quality. Their economic importance was still limited. Trademarks Introduction 2. As long as 3. the WIPO Secretariat provides legal-technical cooperation for the establishment. is being explored. eventually. is developing a “Practical Guide” for national lawmakers. strengthening and effective implementation of existing systems and measures for the legal protection of TCEs at the national and regional levels. form the basis for the development of recommendations. the wealth of the legal analyses.000 years ago. national and regional submissions. Manufacturers from China sold goods bearing their marks in the Mediterranean area over 2.315 Trademarks already existed in the ancient world. for the development of frameworks for the regional and international protection of TCEs. 2. acquired it from local craftsmen. and as mandated by the WIPO Intergovernmental Committee.Fields of Intellectual Property Protection 67 historic antecedents. based on actual national and regional experiences. museums and other institutions.Chapter 2 . and as a component of this program.

airlines. interdependent and for all practical purposes should always be looked at together.322 In modern trade consumers are confronted not only with a vast choice of goods of all kinds.321 This is the approach chosen by Section 22(1) of WIPO’s Draft Industrial Property Act (the Draft Law).319 In order to individualize a product for the consumer. Clearly consumers need to be given the guidance that will allow them to consider the alternatives and make their choice between the competing goods. 2. These signs are called service marks. Thus trademarks reward the manufacturer who constantly produces high-quality goods. basically the same criteria can be applied.” This definition comprises two aspects.68 WIPO Intellectual Property Handbook: Policy. 2. however. being responsible for the product sold under the trademark. There is therefore also a need for signs that enable the consumers to distinguish between the different services such as insurance companies. not necessarily known to him. Definitions Trademarks 2. the goods must be named. car rental firms. It is sufficient that the consumer can trust in a given enterprise. and define it as “any visible sign capable of distinguishing the goods or services of an enterprise from those of other enterprises. 2. so service mark protection has sometimes been introduced by a very short amendment to the existing trademark law. This does not mean that it must inform the consumer of the actual person who has manufactured the product or even the one who is trading in it. of the provisions on the protection of trademarks. For practical purposes one can even simply rely on the distinguishing function of the trademark. This shows that the distinguishing function and the function of indicating the source cannot really be separated.320 The function of indicating the source as described above presupposes that the trademark distinguishes the goods of a given enterprise from those of other enterprises. the trademark must indicate its source. in order to meet consumer expectations.318 “A trademark is any sign that individualizes the goods of a given enterprise and distinguishes them from the goods of its competitors. simply providing for the application to service marks. Service Marks 2. Consequently. Law and Use other characteristics. only if it allows the consumer to distinguish a product sold under it from the goods of other enterprises offered on the market can the trademark fulfill this function. mutatis mutandis. which are sometimes referred to as the different functions of the trademark. and fulfill essentially the same origin-indicating and distinguishing function for services as trademarks do for goods. . but also with an increasing variety of services which tend more and more to be offered on a national and even international scale. but which are.317 By enabling consumers to make their choice between the various goods available on the market. and as a result they stimulate economic progress. trademarks encourage their owners to maintain and improve the quality of the products sold under the trademark. etc.” 2. 2.323 Since service marks are signs that are very similar in nature to trademarks. The medium for naming goods on the market is precisely the trademark.

An enterprise entitled to use the collective mark may in addition also use its own trademark. The main difference between collective marks and certification marks is that the former may be used only by particular enterprises. Finland. Collective marks. 2. . 2. 2. This is an important safeguard for the protection of the public against misleading practices. Sweden and Switzerland). This means that the fact that the said association has not been established in accordance with the law of the country where protection is sought is no reason for refusing such protection. for example. the “open shop” principle applies. Some countries provide for the registration of collective and certification marks. to service marks. the owner of a certification mark must be the representative for the products to which the certification mark applies. Collective Marks 2. the registration of a collective mark may be canceled if that mark is used contrary to the provisions of the regulations or in a manner which misleads the public. while the latter may be used by anybody who complies with the defined standards. therefore. Norway. members of the association which owns the collective mark.327 A collective mark may be owned by an association which itself does not use the collective mark but whose members may use the collective mark.324 It follows from the above principle that service marks can be registered. which are used to indicate the affiliation of enterprises using the mark or which refer to identifiable standards met by the products for which a mark is used. In several countries (for example.326 The following are the common features in the relevant provisions of national law on this topic. Thus. play an important role in the protection of consumers against misleading practices.331 An important requirement for the registration of a certification mark is that the entity which applies for registration is “competent to certify” the products concerned. Rules devised for trademarks therefore apply equally. in principle.330 The certification mark may only be used in accordance with the defined standards. Those provisions. they can moreover be assigned and licensed under the same conditions. Certification Marks 2.Fields of Intellectual Property Protection 69 2. 2. On the other hand. the members may use the collective mark if they comply with the requirements fixed in the regulations concerning the use of the collective mark. in respect of certification marks.328 The regulations concerning the use of the collective mark normally have to be included in an application for the registration of the collective mark and any modifications to the regulations have to be notified to the Trademark Office. the Federal Republic of Germany.Chapter 2 .325 Trademarks typically identify individual enterprises as the origin of marked goods or services. the Convention expressly states the right of each member State to apply its own conditions of protection and to refuse protection if the collective mark is contrary to the public interest. Thus. Collective Marks and Certification Marks 2. in particular. ensure that collective marks are to be admitted for registration and protection in countries other than the country where the association owning the collective mark has been established. renewed and canceled in the same way as trademarks.329 The Paris Convention contains provisions on collective marks in its Article 7bis. the users of a collective mark form a “club” while.

the following types and categories of signs can be imagined: Words: This category includes company names. - - - . If examples are given.g. a certification mark may not be used by anybody who complies with the defined standards. the cry of an animal). such as the need for a workable register and the need for publication of the registered trademark. Three-Dimensional Signs: A typical category of three-dimensional signs is the shape of the goods or their packaging. surnames.g. Combinations of any of those listed above. while the collective mark refers to the membership of its users in a particular organization. drawings and symbols and also twodimensional representations of goods or containers. for instance. whether invented or not. but only by enterprises which have been authorized by the owner of the certification mark to use that mark. Thus. they should be based on practical considerations only. Olfactory Marks (Smell Marks): Imagine that a company sells its goods (e.70 WIPO Intellectual Property Handbook: Policy. Audible Signs (Sound Marks): Two typical categories of sound marks can be distinguished. one or more numerals or any combination thereof.333 It follows from the purpose of the trademark that virtually any sign that can serve to distinguish goods from other goods is capable of constituting a trademark. devices and any combinations thereof in color. the difference between a certification mark and a collective mark is smaller than in other countries. writing paper) with a certain fragrance and the consumer becomes accustomed to recognizing the goods by their smell. it only relates to the purpose of those two kinds of marks: the certification mark refers to certain standards of products or services. other three-dimensional signs such as the three-pointed Mercedes star can serve as a trademark. without being exhaustive. in the United States of America. geographical names and any other words or sets of words. forenames. Colored Marks: This category includes words. Other (Invisible) Signs: Examples of these are signs recognized by touch. Law and Use 2. namely those that can be transcribed in musical notes or other symbols and others (e. Letters and Numerals: Examples are one or more letters. Devices: This category includes fancy devices. as well as color combinations and color as such. and slogans.332 The definition of “certification mark” is not the same in all countries.334 If we adhere strictly to the principle that the sign must serve to distinguish the goods of a given enterprise from those of others. Trademark laws should not therefore attempt to draw up an exhaustive list of signs admitted for registration. Signs which May Serve as Trademarks 2. including logotypes and labels. However. In the United States of America. If there are to be limitations. 2. they should be a practical illustration of what can be registered.

but that registration does not normally give protection to the actual musical phrases so expressed. and the United States of America. In practical terms. The word “apple” or an apple device cannot . picture or any other representation which can be printed) or a description. two different kinds of requirement are to be distinguished. A sign that is not distinctive cannot help the consumer to identify the goods of his choice. Sound marks clearly can serve as trademarks. 2. in order to function.340 The first kind of requirement relates to the basic function of a trademark. 2. 2. since only they can be physically registered and published in a trademark journal to inform the public of the registration of the trademark. must be distinctive. Generally speaking. it is not always clear what is protected by the registration of a three-dimensional sign. or both. In a decision on 11 February 1999.343 A trademark. In practice. 2.341 The second kind of requirement relates to the possible harmful effects of a trademark if it has a misleading character or if it violates public order or morality. Criteria of Protectability 2.335 As mentioned before. From that function it follows that a trademark must be distinguishable among different products. They also appear in Article 6quinquies B of the Paris Convention where it is stated that trademarks enjoying protection under Article 6quinquies A may be denied registration only if “they are devoid of any distinctive character” or if “they are contrary to morality or public order and. countries may set limits on registrability for practical purposes. Patent and Trademark Office for registration.336 A number of countries allow the registration of three-dimensional trademarks. this means that the sound must be recorded and the cassette submitted to the U. its function to distinguish the products or services of one enterprise from the products or services of other enterprises. in particular. for example.339 The requirements which a sign must fulfill in order to serve as a trademark are reasonably standard throughout the world.338 The United States of America is the first country to have recognized the registrability of a smell mark—fresh floral fragrance reminiscent of Plumeria blossoms for sewing thread and embroidery yarn—TTAB(1990). however. namely. however. The majority of countries allow the registration only of signs that can be represented graphically. as registered.S.342 These two kinds of requirement exist in practically all national trademark laws. 2.Fields of Intellectual Property Protection 71 2. A sequence of notes can of course be registered as a device mark. What is protected is the sequence of notes. 2.Chapter 2 .” Requirement of Distinctiveness 2. of such a nature as to deceive the public.337 A similar problem exists for audible signs. against the use of similar devices. allows the registration of sound marks. the Board of Appeal of the Office for Harmonization in the Internal Market (Trademarks and Designs) of the European Community supported the registrability of the smell mark “the smell of fresh cut grass” for tennis balls (R 156/1998-2). obliging the applicant either to submit a two-dimensional representation of the three-dimensional sign (drawing.

and the question is how distinctive a sign must be in order to be registrable. by association. Circumstances such as (possibly long and intensive) use of the sign have to be taken into account when the registrar is of the opinion that the sign lacks the necessary distinctiveness. quality. 2.351 However. 2.72 WIPO Intellectual Property Handbook: Policy. Depending on the steps taken by the user of the sign or third parties. since they require heavy advertising investment to become known to consumers.344 The test of whether a trademark is distinctive is bound to depend on the understanding of the consumers. 2. 2.347 These trademarks may not be the favorites of the marketing people. 2. of course. The same is true of the corresponding devices. of those goods. if it is regarded as being not in itself distinct enough for the purpose of distinguishing between goods and services. origin or any other characteristic. different degrees of distinctiveness. of the goods for which they are to be used. the very fact that the mark has been used in the course of trade for a certain period of time may be sufficient for accepting it for registration. or is capable of being so recognized. that is. This question has to be judged according to the local law and jurisprudence of the country and all the circumstances of the specific case.350 In case of doubt as to whether a term is descriptive or suggestive. Examples are the famous CAMEL trademark for cigarettes (and the equally famous device mark) and the previously-mentioned APPLE mark (both the word and the device) for computers. This shows that distinctive character must be evaluated in relation to the goods to which the trademark is applied. Law and Use be registered for apples. the more difficult it will be to prove secondary meaning. In that connection a distinction is generally made between certain typical categories of marks—fanciful or coined trademarks which are meaningless and the others. 2.345 The distinctiveness of a sign is not an absolute and unchangeable factor. the more descriptive the term is. They tend therefore to choose more or less descriptive terms. that is.349 Marketing people are generally fond of brand names that generate a positive association with the product in the mind of the consumer. 2. it can be acquired or increased or even lost. or at least the persons to whom the sign is addressed.346 There are. but it is highly distinctive for computers. not all signs that are neither meaningless nor arbitrarily used necessarily lack distinctiveness: there is an intermediate category of signs that are suggestive. A sign is distinctive for the goods to which it is to be applied when it is recognized by those to whom it is addressed as identifying goods from a particular trade source. it lacks distinctiveness and cannot be registered as such as a trademark. it can be said that a descriptive term is distinctive for the goods concerned if it has acquired a secondary meaning.348 Common words from everyday language can also be highly distinctive if they communicate a meaning that is arbitrary in relation to the products on which they are used. As a general rule. without being actually descriptive. Those signs are registrable. The crucial question in practice is whether a trademark is suggestive or descriptive of the goods applied for. However. They inherently enjoy very strong legal protection. and a higher percentage of consumer awareness will be necessary. . A famous example of the first category is the KODAK trademark. If the sign is exclusively descriptive. if those to whom it is addressed have come to recognize it as indicating that the goods for which it is used are from a particular trade source. and of the nature. 2. however.

and also for tables. For these reasons the High Court of Delhi. 2. it cannot function as a trademark and its registration should be refused. in view of the absolute need of the trade to be able to use them.Chapter 2 . “coffee” and “instant coffee”. 2. quality. the test to be applied must establish whether consumers are likely to regard a sign as a reference to the origin of the product (distinctive sign) or whether they will rather look on it as a reference to the characteristics of the goods or their geographical origin (descriptive sign). as reflected in Article 3 of the EC Harmonization Directive and also in Section 23.359 The fact of other traders having a legitimate interest in the fair use of a term can therefore be used as a kind of additional ground when making the decisive test of whether consumers are likely to regard the sign as a reference to origin or as a reference to characteristics of the goods. however. India.353 What are the criteria governing the refusal of registration for lack of distinctiveness? Generic Terms 2.358 In line with the definition of the distinctive sign given earlier. chairs. and in the case of doubt the trademark should be registered.2(1) of the Draft Law. they cannot be registered since. etc.352 If a sign is not distinguishable. 2. This practice may be considered strict.) and “chair” (for chairs). 2.354 A sign is generic when it defines a category or type to which the goods belong. however. intended purpose. in 1972 refused registration of the JANTA trademark as in Hindi the word means cheap in price.Fields of Intellectual Property Protection 73 Lack of Distinctiveness 2. . Some trademark laws put the onus on the applicant to show that his mark ought to be registered. namely those to whom the sign is addressed (and in certain cases also those who are otherwise reached by the sign). The applicant normally need not prove distinctiveness. And yet the modern trend. even if they are used intensively and may have acquired a secondary meaning.355 Examples of generic terms are “furniture” (for furniture in general. It is up to the registrar to prove lack of distinctiveness. all having in common that the broad term consistently used to describe them is generic. Other examples would be “drinks”. they must not be monopolized. The term “consumer” is used here as an abbreviation denoting the relevant circles to be considered in a specific case. be used on its own as a basis for a decision to refuse the registration of a term when it is not clear that consumers are also likely to regard the term as descriptive. value. 2. It should not.357 Descriptive signs are those that serve in trade to designate the kind. which shows that there are larger and narrower categories and groups of goods. and sometimes prevents the registration of marks that are demonstrably capable of distinguishing their proprietor’s goods. It is essential to the trade and also to consumers that nobody should be allowed to monopolize such a generic term. is clearly to treat lack of distinctiveness as a ground for refusing an application for registration of a trademark.356 These signs are totally lacking in distinctiveness. and some jurisdictions hold that. time of production or any other characteristic of the goods for which the sign is intended to be used or is being used. place of origin. Descriptive Signs 2.

even without any use. owing to its simplicity or pure illustrative or ornamental character. Nevertheless. The recent international trend therefore goes towards accepting the registration of such signs more liberally.361 An example (with regard to words) would be a relatively long advertising slogan recommending the goods to the consumer which. 2. Some trademark laws (such as the former German trademark law) even expressly excluded them from registration or accepted them only if at least three letters and/or numerals are combined.368 It is certainly true that consumers will not normally regard letters. through long and intensive use.364 For such an association to be conveyed to the consumer. This is true of a device which. numerals and their combinations can become distinctive through use and—as said before—the so-called legitimate interest of other traders in making fair use of them should be no reason for refusal. 2.362 In practice the authorities have to deal with certain other typical categories of cases which in many laws are expressly listed as grounds for refusal. the geographical location referred to must of course—at least to a certain extent—be first known to him.369 Furthermore. may not capture the consumer’s attention at all as a sign referring to the origin of the product. or in the case of letters. 2.366 A geographical denomination may also.363 References to geographical origin (as opposed to the origin of the goods in the sense of the origin-indicating function) are basically not distinctive. even if competitors already exist or establish themselves in the future. and no potential for competitors to settle there in the future.367 These signs are often regarded as being indistinctive and therefore unregistrable. Law and Use Other Signs Lacking Distinctiveness 2. letters. or—depending on factual circumstances—with certain characteristics of the goods attributable to their origin. letters and numerals can be registrable if they are applied for in a fanciful device. but rather as a mere illustrative part of the packaging of the goods offered to him. would be much too complex to be understood by consumers as a reference to the origin of the product. References to areas where nobody would expect the goods concerned to be manufactured are also distinctive.365 Even if a geographical area is known to the consumer. 2. a sign that makes a reference to it can either be or become distinctive if there is no other manufacturer or trader in the same field of activity. numerals or simple geometrical shapes as indications of the origin of the goods. . indicated either as the place of manufacture of the goods in question or of ingredients used in their production. be associated with a certain enterprise to such an extent that it becomes distinctive as a trademark for it. They convey to the consumer an association with the geographical name. 2. Letters. if the sequence is pronounceable. Signs referring to practically unknown localities are therefore distinctive.74 WIPO Intellectual Property Handbook: Policy. 2.360 Signs may lack distinctiveness for other reasons. 2. and which are dealt with below. even when reproduced on the packaging. Reference to Geographical Origin 2. Numerals and Basic Geometrical Shapes 2.

it is. the sign is registrable on the condition that the meaning in question is not descriptive of the goods for which the mark is to be used. It is a matter for practice in the various countries to determine whether they are considered inherently distinguishable or—more probably—basically descriptive with the possibility of becoming distinctive through use. and since the registered owners of such signs can normally use them in any color they may wish to use.372 The use of words and/or devices in colors or combined with colors generally increases their distinctiveness. even where the mark was distinctive enough to be registrable in black and white. ask for a translation (a description of its meaning) in local script. This shows that a trademark owner may have a real interest in registering his mark in the distinctive colors in which it is used. and therefore liable to be imitated by competitors.Chapter 2 . In order to eliminate the previously-mentioned risk of restricting the scope of protection of such a mark. the use of Chinese characters in Switzerland. its owner may register the mark both in black and white and in the colors actually used. may therefore fall outside the scope of protection in view of the use of different colors. However. However. 2.373 Signs consisting exclusively of individual colors or of color combinations can be registrable trademarks. however. since they are not distinctive. had it been in black and white. Singhala characters in the United States of America or Japanese characters (Katakana. Kandi) anywhere but in Japan.370 Imagine the use of a Thai script mark in India or Sri Lanka. Colors 2. Names.374 Company names and trade names are registrable. Since signs registered in black and white are protected against the registration and use of confusingly similar signs regardless of color. .371 Since these marks are distinctive. Consequently. in such countries.375 Common surnames are not registrable in some countries. applications for such signs claiming the colors shown or described in the application are easier to register. As for less common surnames. the usual practice is not to register signs in color. 2. The registrar may. Surnames 2. except where the sign has no more than an ornamental effect. 2. they are basically registrable. Consequently. For the great majority of ordinary consumers these marks are purely fanciful devices. a given color or combination of colors may be an important element of a trademark. If there is such a dominant meaning. important to establish whether another meaning in everyday language will be overwhelmingly recognized by consumers. The first trademark registered in the United Kingdom in 1876 (and still on the register) was a triangle (a basic geometrical shape) in red. protection is then in principle restricted to the actual colors in which the mark is registered. Signs that might have been regarded as confusingly similar to the registered mark. they are in principle distinctive. except where they are deceptive or not distinctive. constantly used by its owner.Fields of Intellectual Property Protection 75 Foreign Script and Transliterations 2. depending on its graphic presentation.

descriptive for others and/or . may still be deceptive. Law and Use Exclusions from Registration on other Grounds: Public Interest Deceptiveness 2. even if they are only evocative or suggestive and therefore distinctive. quality or any other characteristics of the goods or their geographical origin do not. qualify for registration. and secondly they must not be deceptive.376 Trademarks that are likely to deceive the public as to the nature. an application may be distinctive for some. English is also the modern international marketing language. And yet trademarks that have a descriptive meaning. with the result that many trademarks have an English-language connotation quite independent of the geographical origin of the goods marked with it. be deceptive without any reference to a specific geographical origin. Reference to Geographical Origin 2. it should be realized that. therefore. and these cases are more problematic. Consumers will therefore be deceived if the country concerned has a reputation for the goods concerned. Famous examples of such signs are “Champagne” and “Swiss Chocolate. 2. Partial Deceptiveness 2. Depending on the list of goods.378 It is true that fanciful trademarks or marks with an arbitrary meaning for the goods proposed cannot be deceptive.380 Signs that are descriptive or indicative of geographical origin are false for products that do not come from the region described or indicated. 2. 2. A reference to a famous Swiss mountain for chocolate would still deceive consumers.382 In practice. More often indirect references are made.385 We have seen that the question whether or not a trademark is inherently deceptive must be examined in relation to the goods in respect of which the application is made. In such cases the consumer will be deceived if the reference to the geographical origin has the wrong connotations for him. such cases of direct reference to geographical origin are relatively rare.381 This is particularly true if the region or locality has a reputation.76 WIPO Intellectual Property Handbook: Policy. 2.377 The test here is for intrinsic deception. 2. The very fact that a word comes obviously from a particular foreign language may give consumers the impression that the product comes from the country where that language is spoken. This test should be clearly distinguished from the test for the risk of confusing customers by the use of identical or similar trademarks for identical or similar goods. in the interest of the public. 2. inherent in the trademark itself when associated with the goods for which it is proposed.379 As a rule.” 2. in addition to being spoken in many different countries all over the world. under certain circumstances. it can be said that the more descriptive a trademark is.383 Indeed even the use of foreign words can.384 However. Such trademarks have therefore to be examined from two angles: first they must be distinctive. the more easily it will deceive if it is not used for the goods with the characteristics described. and that consumers are generally aware of the fact. as would a device mark consisting of a typical alpine landscape.

Use Requirements Need for an Obligation to Use 2. the examiner refuses the whole application in some countries.389 Use does still play an important role. Consequently. Even though trademark laws generally do not require use as a condition for the application for trademark registration. the registration of a trademark merely confirms the trademark right that has been acquired by use. in his opinion. but today trademark protection systems generally combine both elements.Fields of Intellectual Property Protection 77 deceptive for still others. In others. the first user has priority in a trademark dispute. he accepts the application only for the goods for which. This is especially true of the many companies that are active in international trade. therefore. however: first of all.Chapter 2 . Protection of Trademark Rights 2. Both approaches have developed historically. 2. they must from the very beginning apply for the registration of their new trademarks in all countries of potential future use. and full trademark protection is properly secured only by registration. in countries that have traditionally based trademark protection on use.390 Trademark protection is not an end in itself.388 A trademark can be protected on the basis of either use or registration.387 A country generally protects its national flag. countries are obliged by Article 6ter of the Paris Convention also to protect the notified signs of other member States and international intergovernmental organizations (such as the United Nations Organization). The Paris Convention places contracting countries under the obligation to provide for a trademark register. Nearly all countries today provide for a trademark register. Furthermore. or even the actual registration. Signs Reserved for Use by the State. In such cases the examiner has to require a limitation of the list of goods. Public Institutions or International Organizations 2. 2. Even in their own countries companies . the ultimate reason for trademark protection is the function of distinguishing the goods on which the trademark is used from others. The Draft Law also lists this ground for refusal under Section 23. Over one hundred and fifty States have adhered to the Paris Convention.391 At the same time trademark owners need a grace period after registration before the use obligation comes into effect. its official name and the names of official institutions in its own interest. It makes no economic sense. not the one who first registered the trademark. to protect trademarks by registration without imposing the obligation to use them. There is an absolute need to provide for a use obligation in trademark law. the mark is not deceptive and refuses it for the others. Unused trademarks are an artificial barrier to the registration of new marks. Signs Contrary to Morality or Public Policy 2. Should the applicant not agree to such limitation.2(ii).386 Trademark laws generally deny registration to signs that are contrary to morality or public policy. In order to avoid loopholes in the protection of their new trademarks of which competitors could take advantage.

393 The principal consequence of unjustified non-use is that the registration is open to cancellation at the request of a person with a legitimate interest.78 WIPO Intellectual Property Handbook: Policy. improper use by the owner. 2. There is moreover a tendency to require of the registered owner that he prove use. By systematically using a product designation in addition to the trademark. This is especially true of pharmaceutical companies. and any other circumstance that is not due to fault or negligence on the part of the proprietor of the mark. 2. but more often five years.396 Non-use does not always lead to invalidation of the trademark right. its significance as a mark has been lost. 2. also called soluble coffee. which have to make clinical tests and have to apply for approval of their product by the health authorities. Proper Use of Trademarks 2. infringement action). In the interest of removing “deadwood” from the register. This is an administrative complication which is unnecessary in view of the fact that an interested person can at any time at all take appropriate action against an unused trademark registration. provoking transformation of the mark into a generic term.400 The basic rule is that the trademark should not be used as. such reversal of the burden of proof is justified. or instead of. and improper use by third parties that is tolerated by the owner. so that. 2. two things can cause genericness: namely. however.397 Non-use can lead to the loss of trademark rights. 2. When instant coffee. the product designation.394 The burden of proof should be on the trademark owner not only in cancellation proceedings but also in any other proceedings where the owner is alleged to have taken advantage of his unused trademark right (opposition procedure. 2. and no additional name was given to the category by its proprietors. however. 2.398 Basically.399 In order to avoid improper use. who is involved in advertising or publicizing the brand. such as import restrictions or special legal requirements within the country. the first product marketed by the company that invented it . Improper use can have the same result. was invented in 1938. since it is very difficult for the interested third party to prove non-use.392 The grace period granted in trademark laws that provide for a use obligation is sometimes three years. everyone in the company owning the trademark. CELLOPHANE and LINOLEUM became generic terms because they were the only product in their category. This is especially important if the trademark proprietor has invented a totally new product which at the outset is the only one in the category. Consequences of Non-Use 2. the proprietor clearly informs the public that his mark identifies a specific product as one in a certain category. A mark may become liable for removal from the Register if the registered owner has provoked or tolerated its transformation into a generic name for one or more of the goods or services in respect of which the mark is registered. must follow some rules. Non-use can be justified in the case of force majeure. in trade circles and in the eyes of the appropriate consumers and of the public in general.395 No evidence of use should be required for the renewal of a trademark registration. Law and Use often need several years before they can properly launch a newly-developed product on the market. Trademarks such as FRIGIDAIRE.

a trademark should be identified as such by a trademark notice. official publications. such as authentication or legalization. Trademark law in the United States of America allows the use of a long statement (such as “Registered with the United States Patent and Trademark Office”) to be replaced by a short symbol. 2. Only a few laws provide for such notices. and expressly prohibits certain formalities.403 Finally. an exhaustive list of information which Trademark Offices of Contracting Parties may require for a trademark registration. It is specifically important that the trademark should not be used as or instead of the product description in dictionaries. it is not enough just to follow these rules: the trademark owner must also ensure that third parties and the public do not misuse his mark. in Article 3.Chapter 2 . 2. or ®.404 However. and the possessive “s” and the plural form should be avoided. countries provide for an application form. Often further formalities are imposed. from the start the company systematically used a product designation such as “instant coffee” or “soluble coffee” on its labels. 2. and making their use on goods compulsory is prohibited by Article 5D of the Paris Convention. it is necessary to claim protection of the sign in its three-dimensional form. However.405 Applications for registration of a trademark are to be filed with the competent government authority which in most countries is the same as the authority competent for processing patent applications.402 Furthermore. It would be wrong to talk about NESCAFÉ’s flavor or about three NESCAFÉs instead of three varieties of NESCAFÉ.Fields of Intellectual Property Protection 79 was called NESCAFÉ. Its use is recommended for registered trademarks as a warning to competitors not to engage in any act that would infringe the mark.407 The sign filed for registration must appear in the application form or in an annex to it. in other words the trademark should not be used with an article.408 If a three-dimensional sign is filed for registration. If it is intended that the sign should be registered in color.401 A second important rule is that trademarks should always be used as true adjectives and never as nouns. etc. the colors must be claimed and a specimen in color or the description of the color(s) must be submitted. The application form has to be completed with the name and address of the applicant. 2. Over the years this symbol has spread throughout the world and become a widely recognized symbol for a registered trademark.406 In general. which are considered unnecessary and particularly burdensome. the circled R.” 2. Usually. The Trademark Law Treaty (TLT) contains. The TLT also provides Model International Forms which contain all relevant information and which have to be accepted by Offices of Contracting Parties. Foreigners have either to give an address for service in the country or to use an agent holding a power of attorney to be signed by the applicant. journals. it is advisable always to highlight the trademark. it is called “Industrial Property Office” or “Patent and Trademark Office” or “Trademark Office. The sign must moreover be graphically represented in a manner . the use of which is mandatory in certain countries. that is. Trademark Registration Application for Registration 2. 2. namely. 2. to make it stand out from its surroundings.

Examination Examination as to Form 2. class fee. Examination as to Substance 2. while in others one application is sufficient for several classes. Such an examination is highly desirable in the interest of consumer protection. On the other hand. examination fee.412 Countries generally accept an application for registration of a trademark only if the formal requirements are fulfilled. all-embracing fee or several (application fee. 2.80 WIPO Intellectual Property Handbook: Policy. that is. etc.411 Finally. one or more lots of fees have to be paid for the registration of a trademark.417 In general.410 An important treaty for international trade is the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks. On the one hand. collected in a card index or integrated in a computerized system).409 The applicant has also to list the goods for which the sign is to be registered. Law and Use that allows it to be reproduced for a twofold purpose: it must be possible to register it (regardless of the form in which the register is established. Owners of prior rights must be able to take note of the trademark application. not immoral.413 Most countries examine trademark applications as to substance in the interest of both the public and competitors. In some countries a separate application has to be made for each class. that is. Both systems have advantages and disadvantages. The document in the back flap of this publication shows the Contracting States of this treaty.414 One has to make a clear distinction between two types of grounds for refusal. whether they are sufficiently distinctive. which normally is ensured by its publication in a trademark journal. three typical approaches can be observed internationally. not deceptive. registration fee. it is simpler and more cost-efficient to charge a single fee. etc. 2. this may lead to unjust consequences for applicants who decide to withdraw the application totally or partially during the registration procedure. objective grounds for refusal. .). that is.415 Trademarks may be examined for absolute. whether the rights applied for are identical or similar to prior rights that have been applied for or granted for identical or similar goods. which establishes an international classification of goods and services for the purpose of registration of trademarks. 2.416 The laws of many countries provide also for examination on relative grounds. whether the marks are entered in a book. 2. for example. because of an objection from the owner of a prior right. A country may provide for a single. or because of insurmountable objections from the registrar. Such examination may either be made ex officio and/or on the basis of an opposition procedure. 2. and for the trade in general. 2. it is important that nobody should be able to have an exclusive right in a descriptive or even a generic term by a simple administrative act. but for competitors too. Trademark laws provide generally for a classification of goods for the purposes of registration. 2.

the office should give the applicant an opportunity to make observations. and follows a modern trend which is reflected in the European Community Trade Mark system.426 If the application leads to registration.425 The decision refusing an application either partly or totally must be open to appeal. Most applicants do such searches regularly. 2. with an administrative appeal board or with the court. in Europe. even more importantly. which deals with the rights deriving from trademark registration.420 The third system is the German one. it must be a valid basis for an opposition procedure. the priority of the right should date back to the date of filing for registration.421 Industry in general prefers the latter system. And.Fields of Intellectual Property Protection 81 2. in principle. 2. This system is a compromise between the more extreme systems mentioned before. it is more adequate to deal with all aspects of trademark similarity in Chapter 6. 2.Chapter 2 .424 Before issuing a total or partial refusal of the application. Refusal of Registration 2. However. and even more so before beginning to use it. while companies have at least their more important registered trademarks watched. providing for examination by the office for absolute and relative grounds. since it is less time-consuming and much more flexible. even though in the latter case the factual circumstances of the infringement will play an additional role. either by their trademark agents or by one of the international watching services. While it is true that the application is not normally a sufficient basis for bringing an infringement action against a later right. 2. by countries such as Portugal. In view of the many trademarks on the registers of countries all over the world. 2. in order to keep themselves informed of applications for registration of potentially conflicting similar marks. and in certain cases can be very long. Spain and the Northern European countries. the office issues a certificate to the owner. The owner’s exclusive right exists from the date of registration. Depending on the legal system of the country.422 The standards to be applied by the registrar when examining whether a trademark application is to be refused because of a prior right are the same. in which the owner of prior rights can oppose the infringing trademark application by means of a simplified and not too costly procedure.418 The British system. This system is also applied. the law provides for no opposition procedure and it is left to the owner of the prior rights to bring a cancellation or infringement action against the registration or use of a more recent sign. which provides for examination by the office for absolute grounds and also for an administrative opposition procedure. as those to be applied in an opposition procedure or by a judge in an infringement action. This system has been used under the old trademark laws of France and Switzerland—both countries introduced opposition procedures in their new laws.419 Under a second approach the office examines only for absolute grounds. the date of the application for registration will be decisive in a later court case. A later application can for various reasons lead to registration sooner (for instance where the earlier application was refused by the examiner . Date of Registration 2. The time that passes before an application leads to registration varies a great deal. and also for an opposition procedure. 2. the appeal may be lodged with the registrar. it is in any case advisable to carry out a search for prior rights before applying for registration of a trademark.423 Since one of the basic rights of the owner of a registered mark is to prevent others from using his mark or a confusingly similar one.

renewals and changes of name.427 Furthermore. it should be possible for the owner to make a voluntary restriction of the list of goods of the original registration.82 WIPO Intellectual Property Handbook: Policy. Of course. regardless of the medium on which the data are stored.431 It is important for owners of prior rights and the public that all relevant data contained in the register. and where the priority of any other mark is claimed (Paris Convention. there are a number of grounds on which a trademark can be removed from the register. a time limit is generally provided for in trademark laws. Duration and Renewal 2.432 The register of marks should. the registration of trademarks without a time limit would lead to an undesirable amount of trademark registrations that are no longer of any interest to their owners. and not always successful.433 The cancellation of a trademark registration is a serious matter for its owner. Article 4) a statement to that effect. 2. . without any new examination of the mark for absolute or relative grounds for refusal. but also on the contents of pending applications.428 Since trademarks do not grant an exclusive right that could be exploited. For administrative reasons. Publication and Access to the Register 2. Even if unused marks may be removed from the register. moreover. In any case. however. the owner of the earlier application must have the prior right in relation to the owner of a later application. 2. should be published in an official gazette. as it leads to a loss of his rights under the registration. but it is possible to renew registrations when the time limit expires. Furthermore. such as the name and address of the applicant. where the mark is three-dimensional a statement to that effect. the requirement of renewal and the payment of a renewal fee is a welcome opportunity for a trademark owner to consider whether it is still worth having his registration renewed. address and ownership. registrations. such a procedure would be costly and time-consuming for the interested party. Nevertheless. the colors claimed. the applicant can claim the priority of his national registration under Article 4 of the Paris Convention if the application in the foreign country is made within six months of the filing date of the first application. Removal of the Trademark from the Register 2. Law and Use and finally granted on appeal). as the trademark may have been superseded in its graphic form. renewals should be made simply on payment of the fee.429 One of the reasons for imposing such time limits is that the office can charge a fee for renewal. namely all recorded data not only on registrations. the goods grouped according to the classification system.430 Consequently. Clearly. This enables owners of prior rights to take the necessary steps. or may even be no longer in use. 2. a representation of the mark. concerning applications. The publication of applications and registrations should contain all the important data. including opposition (if provided for) or an action for cancellation. be accessible to the public. To ensure that owners of prior rights are properly informed it is indispensable that the register contain up to date information. especially if he can save fees by doing so. and this is a welcome source of revenue. Excessive fees should also be avoided. 2. there is no need to limit their validity.

2. Partial cancellation extends either to all registered goods for which use cannot be proved or at least to all those not similar to the goods that the registered owner has used. ask for its cancellation. 2. for administrative reasons. Sometimes trademark laws also provide an ex officio procedure for that purpose.441 Normally. it can be declared null and void by the court at the request of any interested party. the authorities will in principle remove the mark from the register either wholly or in part. removal of the registration is ordered by the court.436 The registered owner can himself. As a consequence of the declaration. its cancellation is excluded if in the meantime it has become distinctive by use. Cancellation on Account of Nullity 2. this leads to a partial cancellation of the trademark registration for all the goods in respect of which it is not renewed. even if the trademark should not have been registered owing to lack of distinctiveness. Moreover. this leads to the removal of the trademark from the register. but only for some of the registered goods. removal from the register is ordered only if the grounds for invalidity already existed when the trademark was registered. If the owner cannot justify the non-use. at any time. the registration is removed for those goods only.442 Such acquired distinctiveness cannot. the court orders partial cancellation. At the request of the registered owner. any interested party can.440 If the grounds for invalidity exist only with respect to some of the registered goods. the trademark is removed from the register. Removal for Failure to Use 2. Removal at the Request of the Registered Owner 2.435 If the law permits renewal of the trademark registration for just some of the registered goods (to be encouraged as a means of removing “deadwood” from the register). a trademark is registered for a certain period of time only.434 It has been shown that. Even if his registration is canceled for all but the one product for which he can prove use.437 If the owner of a trademark fails to use his mark within the grace period provided for in the law. he can still defend his exclusive right to his registered trademark against the registration and use of an identical or confusingly similar trademark by a competitor for all goods that are identical or similar to the product for which his trademark is registered and used. therefore. If the owner can prove use or justify the non-use.439 If a trademark consists of a sign that should not have been registered. 2. however. prevent the removal from the register of trademarks that consist of generic or deceptive terms.438 This does not mean that the registered owner’s rights would be strictly limited to the goods used. Registries generally allow a period of grace for payment of the renewal fee (usually with a surcharge) in accordance with Article 5bis of the Paris Convention. in principle. renounce his registration for either all or some of the goods for which the mark is registered. And yet there can be exceptional cases in .Fields of Intellectual Property Protection 83 Removal for Failure to Renew 2. 2. If the owner fails to renew his trademark registration and more specifically fails to pay the renewal fee. or even to a single product on which his trademark has been used.Chapter 2 . 2.

the mark becomes liable for removal from the register. paragraph 2. containers. packaging.444 The registered owner has the exclusive right to use the trademark. namely by applying the principle of territoriality of rights. both derived from the right to use a trademark. This short definition of the specific subject matter of trademark rights encompasses two things: the right to use the trademark and the right to exclude others from using it. It would indeed be contradictory not to grant such a positive right of use while imposing an obligation to use. 2. Of course. such as the repacking of goods bearing his mark.443 If the registered owner has provoked or tolerated the transformation of a mark into a generic name for one or more of the goods or services in respect of which the mark is registered. labels. etc. or to use it in any other way in relation to the goods for which it is registered. .445 This positive right of use belonging to the trademark owner is recognized in most trademark laws. the right of use is subject to other laws and rights. Consequently. However. Altering the product and selling it under the same mark has the same effect as affixing the mark to goods. The owner’s exclusive right to affix the trademark on the goods and their packaging. This is explained under “Proper Use of Trademarks”. labels. Rights Arising from Trademark Registration 2. containers.84 WIPO Intellectual Property Handbook: Policy. etc. Still other countries make the decision on whether the trademark owner can object to parallel imports dependent on whether consumers are likely to be mistaken as to the characteristics or quality of the imported goods. Removal of a Mark that has Lost its Distinctiveness 2. The Right to Use the Trademark 2. What is allowed under trademark law may be prohibited under competition law or by public enactment. it is a principle that applies only to the right to launch the product bearing the trademark on the market for the first time. or the alteration and subsequent sale of his products under his mark.448 It is important to make a distinction between these two rights. the principle of exhaustion of trademark rights clearly applies within the country. continues to exist. Other countries do allow such parallel imports to be objected to. 2. as is any other right provided by law. This is the essence of the so-called principle of exhaustion of the trademark right which is expressed in Section 26(3) of the Draft Law. Law and Use which the deceptive meaning that would have prevented trademark registration at the outset has been lost in the meantime. Some countries do not allow objections to parallel imports of products marketed in a foreign country by the trademark owner or by a third party with his consent. he can object to acts that infringe that right. the destruction of his mark on the goods. he cannot object to further sales of the product in the course of trade.382.447 It means also the right to introduce the goods to the market under the trademark. 2. 2. 2.449 When the trademark owner has launched a product on the market under his mark.450 Apart from this special aspect of parallel imports of goods marketed for the first time in a foreign country.446 What does the right of use mean? It means first the right of the owner of the mark to affix it on goods.

a third right out of the series of rights incorporated in the right to use a trademark is the trademark owner’s right to use his mark in advertising. He must be able to object to any use of his trademark by a third party for goods for which it is protected. If that is not true.455 Many laws not only provide for an infringement action. to its use in relation to the goods and to the offering of the goods for sale under the mark. Sometimes totally different goods are listed in the same class (for instance computers. since consumers are to be protected against confusion. which is generally laid down by law. protection has to be reduced to the goods on which the mark is actually used and goods similar to them. The trademark is infringed if.452 It follows from the mark’s basic function of distinguishing the goods of its owner from those of others that he must be able to object to the use of confusingly similar marks in order to prevent consumers and the public in general from being misled. 2. etc. The classification of goods cannot therefore be decisive for the question of similarity. the trademark owner has a right to intervene.457 Trademarks are registered for goods in certain classes which have been established for purely administrative purposes.451 Finally. however. the test is much broader. protection generally extends to the use of similar trademarks for similar goods. that the trademark owner cannot unconditionally object to the use of his trademark or a similar mark for the goods for which his trademark is registered or for similar goods. documents. if such use is likely to confuse the consumer. but he could face a counterattack leading to partial cancellation of his trademark for non-use. or the use of the mark in advertising.Chapter 2 . 2. fire extinguishers and telephones in class 9). but also offer an administrative opposition procedure against an application for the registration of a confusingly similar trademark. 2. because allowance has to be made for the risk of confusion that could arise from any use that the applicant might possibly make of his trademark if it were registered. to the affixing of the mark on such goods. it gives the consumer the impression that the genuine product has been marketed by the trademark owner under his mark. The Right to Exclude Others from Using the Mark 2. while similar goods can clearly be listed in different classes (adhesives may fall into classes 1. business papers or any other kind of document. Depending on the procedural system in the country. Such protection operates automatically for all registered goods during the user’s grace period. 5 and 16). The test is not a hypothetical one. there is a risk or a likelihood of the public being misled. on business papers. the trademark owner may be able to rely on those formal rights for goods for which the mark is registered but not used.Fields of Intellectual Property Protection 85 that is. owing to the use of an identical or similar sign for identical or similar goods. 2. the question whether a trademark is confusingly similar to an earlier right is one of the cornerstones of practical trademark protection. 3.454 The exclusive rights of the trademark owner can be exercised by means of an infringement action. The test is in fact the same as is applied by the office in its examination for prior third-party rights.456 Together with the question whether a trademark is distinctive. . This is the essence of the exclusive right afforded to the trademark owner by registration. Any goods for which the trademark was registered but which are not in use should no longer be a valid basis for asserting exclusive trademark rights. eyeglasses. Furthermore. Similarity of Goods 2. In that case.453 It must be underlined. but has to deal with the reality of infringement in the marketplace. 2. When that period has expired. His trademark must be protected for the goods specified in the registration.

Law and Use 2. even if they are used for different purposes. confusion is likely to arise. That is the only way for the system to function. since they are generally not marketed by the same enterprise. however. 2. 2. nor is actual confusion. If they are largely made of the same substance. Even identical marks are unlikely to create confusion as to the origin of the goods if the goods are very different. but also for the trademark owner who loses the sale. or is likely to arise. 2.465 Since the average consumer generally does not at first glance recognize differences between the marks that he might spot if he took his time to study the mark and the product offered under it more carefully. they will generally be held to be similar. but especially the usual origin of the goods. Raw materials and finished goods manufactured out of the raw materials are not normally similar. unsophisticated. 2. Similarity of Trademarks 2.86 WIPO Intellectual Property Handbook: Policy. always in a section of the public. As a general rule goods are similar if. the first impression that he gains must be decisive. very similar .466 Furthermore. The likelihood of confusion is the test. in other words who are actually addressed or reached by the trademark. If the consumer is confused. the consuming public would be likely to believe that they came from the same source. and the public as such cannot be confused. in view of the similarity of the two marks. and the consumer may fail to buy the product that he wants. phrases such as “likelihood of confusion of the consumer” (or “of the public”) have to be interpreted. This is especially true for mass-consumption goods offered in self-service stores. In those fields. In this context it must be taken into account that the average consumer also has an average memory. 2. A trademark is confusingly similar to a prior mark if it is used for similar goods and so closely resembles the prior mark that there is a likelihood of consumers being misled as to the origin of the goods. the purpose for which they are used and the trade channels through which they are marketed. The test. is whether they are confusingly similar. 2. Confusion arises. He mistakes the products offered under the infringing mark for the genuine product that he actually wants to buy. and that it must be sufficient for him to doubt whether the trademark with which he is confronted is the one he knows. 2. some rules have been developed which help to define in specific cases whether. including the nature of the goods. The purchaser of a sophisticated and costly machine.462 Of course. It has to be determined in the specific case what the relevant part of the public is that has to be considered. when offered for sale under an identical mark. “The consumer” does not exist.463 Since it is very difficult to work in practice with the broad definition of confusing similarity. poorly-educated consumers and also children are more liable to be confused. This is bad for the consumer.459 A further aspect is the nature and composition of goods. the distinguishing role of the trademark is not functioning.460 Trademarks can be more or less similar to each other. therefore.458 The test of whether goods are similar is based on the assumption that identical marks are used. All the circumstances of the case must be taken into account. of course.461 No intention to confuse on the part of the infringer is necessary. he is generally confronted with the infringing mark in the shop without seeing the product bearing the mark that he knows and remembers more or less accurately. and the usual point of sale.464 The most important point is that the consumer does not compare trademarks side by side. car or aircraft will no doubt be more attentive than the consumer in the self-service store.

Chapter 2 . however.468 The second important point when testing the similarity of trademarks is that they should be compared as a whole. and will tend to make the same assumption about any new trademark containing the same element. the testing of similarity must be particularly strict. and that more weight should be given to common elements which may lead to confusion. the graphic presentation of the trademark plays an important part. and will no longer pay special attention to it as a distinctive element of the mark. the common element of the two signs is descriptive. However. where the consumers may have become accustomed to associate the series with a common source. the contrary is true. and that similarity in one of those areas is sufficient for infringement if it misleads the public. Common prefixes are normally more important than common suffixes. which would probably be easily confused if applied to mass-consumption goods. sufficient to exclude the use of the same element by a competitor as a component of a mark which on the whole is very different. the pronunciation and in the meaning of the sign. For drugs sold over the counter. it also has to be established whether there are other trademarks on the register and used by different owners that have the same common element.470 The same is true if a mark contains a highly distinctive part (part of the word mark or one of several words forming the mark). 2.Fields of Intellectual Property Protection 87 trademarks do coexist. 2. In view of the potentially serious consequences for the uneducated consumer if he buys a wrong product.471 When trademarks with a common element are compared. Long words with common or similar beginnings are more likely to be confused than short words with different initial letters. This is the special case of the series mark. 2. if all marks having such a common element (normally a prefix or suffix) are registered and used by the same proprietor (or with his consent).474 With regard to similarity in writing. they are more likely to be confused than if the similarity is in their endings. Notwithstanding this basic rule of comparing trademarks as a whole and not dividing them into parts. If so the consumer will have become accustomed to the use of this element by different proprietors. while differences overlooked by the average consumer should not be emphasized. The use of such a common element can only constitute infringement if consumers really have come to recognize the common element of the series of marks used by the registered owner as indicating the source of the goods offered by him under the different marks containing that element. on the other hand. the mere fact of somebody using a series of trademarks that have a common element is not. Similarity in pronunciation is important because trademarks that are written . if two signs are very similar or identical at the beginning.467 Another interesting example of how the category of goods can influence the testing of confusing similarity is to be found in the field of pharmaceuticals. 2. 2. 2. as such. Prescription drugs are normally sold to the consumer (on prescription by doctors) by educated pharmacists. and that highly distinctive element is exactly or almost exactly duplicated by the infringing mark. 2.472 The situation is different.469 The third important point is that highly distinctive marks (coined or arbitrarily used marks) are more likely to be confused than marks with associative meanings in relation to the goods for which they are registered. the structure of the signs is important. the consumer’s attention tends to focus on the rest of the mark. so the testing of similarity can be more generous.473 The fourth important point is that confusion can arise from similarity in the writing. who are less likely to be misled by relatively similar brand names used for medicines for different indications. 2. If.

479 A special case is the device that can be named by a word. 2. to object by opposition or court action to an application for registration. 2. 2. 2. in the case of composite marks any similarity in the word parts of the two marks is likely to be emphasized if the figurative parts of the marks are also similar. Influence of Use and Non-Use 2. some special aspects have to be taken into account for figurative marks (devices). . and whether the owner of the word mark “star” should be able to object to all possible graphic presentations of a star in a device mark. 2. this does not make any difference when the two trademarks are compared orally. Furthermore. for instance two tiger or lion or cow devices (there are numerous cow devices registered for milk products) must be sufficiently similar for there to be confusion. for instance. as similarity in pronunciation constitutes trademark infringement. regardless of the use of the latter. after the grace period has expired. of similar marks for goods identical or even similar to all goods covered by the existing registration. Two such devices.481 For the same preventive purpose. it is still necessary that the trademark protection system allow the trademark owner to object to an application for registration of a trademark which is based on mere intention to use the mark.475 A totally different meaning can preclude confusion between two marks that would normally be regarded as confusingly similar. Similarity in the figurative part can only lead to confusion if that figurative part is a distinctive element of the mark. If the owner is not using his trademark.88 WIPO Intellectual Property Handbook: Policy.476 Independently of the above rules. many trademark laws allow the owner of a registered trademark to object in opposition procedures to the filing.477 For purely fanciful marks the graphical impression conveyed by the two marks is decisive.482 More modern conceptions allow the trademark owner. 2. the marks as a whole can be confusingly similar in view of the similarity of their figurative elements. Even though the words might not be confused in writing or pronunciation. 2. and pronunciation counts in oral communication: even if similarity in writing is avoided by the use of very different graphic presentations. and if he is using it on one or several of the goods for which it is registered. The defendant who is aware of the total or partial non-use must therefore counterattack by introducing an invalidation action seeking partial or total cancellation of the existing trademark registration for non-use. To prevent confusion. or to the use. and in infringement actions to the use. the opposition is refused. the same animal. such as a star device and the word “star. The burden of proof of use in an opposition procedure is on the owner of the right. Law and Use differently may be pronounced in the same way. of an identical or similar mark for goods identical or similar only to those on which the owner is actually using his. The situation is different when two device marks are compared in which both feature.” The question arises whether the corresponding word as a trademark should be prohibited.480 Confusion in the marketplace can only arise from actual use on similar goods. however.478 For composite marks the similarity of the word part is normally sufficient. only those on which it is used are taken into consideration for the test of confusing similarity.

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2.483 Many laws also allow the defendant in trademark infringement actions to claim non-use of the trademark on which the action is based, and the owner can then only succeed in his infringement action if he can prove use of his mark. 2.484 If the infringed trademark is being used, the extent of the use can influence the test of confusing similarity. Intensive use increases the distinctiveness of the mark, and confusion with well-known marks is more likely even if the goods on which the infringing mark is used are less similar or if the similarity of the marks is less apparent. Protection Beyond the Scope of Confusing Similarity 2.485 Well-known or famous marks, which are highly reputed, are in some countries given protection that goes beyond the scope of similarity of the goods. Such far-reaching protection should only be given if the use of the same mark or a nearly identical mark for other, dissimilar goods would be prejudicial to its distinctiveness or its reputation. This extended protection does not necessarily cover all possible goods. It could well be that the use of a mark identical to the well-known mark would do unjustified harm in relation to a certain category of goods, whereas the same use on totally dissimilar goods might not be against the interests of the registered owner of the well-known mark. The decision has to be determined by all the circumstances of the specific case, including the extent of reputation of the mark, the type of goods for which it is used by the infringer, the manner in which he presents his goods, and so on. 2.486 Yet reputation is not sufficient on its own, of course; broader protection is justified only where the use of a sign without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the reputation of the trademark. 2.487 In September 1999 the WIPO General Assembly and the Assembly of the Paris Union adopted a Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks which provides guidance for determining whether a particular mark is well-known, and determines the scope of protection of well-known marks (see Chapter 5, paragraphs 5.731 and 5.732). Restriction of the Exclusive Right in the Public Interest 2.488 In the same way as the owner’s right to use his trademark can be restricted by other rights, his right to prevent third parties from using his mark can be restricted by the legitimate interests of others. A provision is contained in many trademark laws which states that the registration of the mark does not confer on its registered owner the right to preclude third parties from using bona fide, for example, their names, addresses, or pseudonyms. 2.489 The trademark owner also cannot prevent third parties who are not his competitors from referring to his trademark by acts such as the listing of the mark in a compendium of trademarks, or from using it in newspaper articles or in books or other publications. Remedies for Trademark Infringement 2.490 A successful infringement action leads to prohibition of the use of the confusingly similar mark. If the infringing mark is registered, cancellation of the registration is ordered. 2.491 The trademark owner can also, in principle, ask for compensation for damages. Damages are difficult to prove in trademark infringement cases, however, so this remedy is not very important in practice.

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2.492 The situation is of course different in cases of counterfeiting, which will be dealt with below. Trademark Piracy, Counterfeiting and Imitation of Labels and Packaging Trademark Piracy 2.493 Trademark piracy means the registration or use of a generally well-known foreign trademark that is not registered in the country or is invalid as a result of non-use. 2.494 The Paris Convention provides in its Article 6bis that a well-known trademark must be protected even if it is not registered in the country. Article 6bis is restricted to identical and similar goods, however. Often well-known trademarks are used by pirates on totally different goods, or for services. Furthermore, courts sometimes require a trademark to be well-known in the country where piracy is discovered, and deny protection, even if the true owner of the trademark can prove that it is internationally well-known in a considerable number of other countries. Improved protection against trademark piracy is therefore needed. The Joint Recommendation Concerning Provisions of the Protection of Well-Known Marks which was adopted by the WIPO General Assembly and the Assembly of the Paris Union in September 1999 provides some guidance in this respect. Counterfeiting What is Counterfeiting? 2.495 Counterfeiting is first of all the imitation of a product. The counterfeit is not only identical in the generic sense of the term. It also gives the impression of being the genuine product (for instance a LOUIS VUITTON bag), originating from the genuine manufacturer or trader. 2.496 The offering of such a counterfeit product is only meaningful, of course, if the genuine product is known to the consumer. Consequently, counterfeit goods often belong to the category of luxury goods and bear a well-known trademark. In fact, however, this is only a coincidence: counterfeit goods can just as well be mass-consumption goods, or goods not sold under a trademark but protected by other intellectual property rights such as copyright or design protection. They can also be known to a small group of specialized consumers only, such as brakes to be used for cars, or aircraft, or pesticides known to clients in agriculture. These examples show at the same time how dangerous the use of counterfeit goods can be - a whole year’s crop in a large part of Africa was once destroyed by the use of a counterfeit pesticide. 2.497 Some very typical and widely-known examples of counterfeit goods, have been, for example, the false LOUIS VUITTON bags, the false ROLEX, CARTIER and other luxury watches, the false PUMA and REEBOK sports shoes, the false LACOSTE sports shirts and so on. Worldwide sales of some counterfeit products may exceed those of the genuine products. This shows that counterfeiting is an economic phenomenon of worldwide importance, which can represent an alarming percentage of world trade. Indeed, it is important to recognize that counterfeiting is an economic crime, comparable to theft. Counterfeiters not only deceive the consumer but also damage the reputation of the genuine manufacturer, apart from which they do not pay taxes and other duties to the State.

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Legal Protection Against Counterfeiting 2.498 Although it is not a condition and not always the case, counterfeit goods generally bear a trademark. This has the advantage of making counterfeiting actionable as trademark infringement, which is generally easier than fighting against infringement of other intellectual property rights, which may also be involved. However, since counterfeiting is an economically serious and important problem, the remedies specified in trademark laws are often not sufficient to serve as an effective deterrent. This is a problem that concerns three areas of law enforcement, all of which are essential if counterfeiting is to be successfully combated. 2.499 Laws must provide for severe criminal sanctions, including imprisonment. Most trademark laws provide for criminal sanctions for trademark infringement, but they were often enacted long ago and are no longer realistic. Counterfeiters pay fines, and imprisonment is rarely ordered. 2.500 Rapid, far-reaching remedies are necessary. Counterfeiters do not operate from a normal business address, and in the event of prosecution are difficult to trace. Often they can only be found after a long and thorough investigation. There is therefore a pressing need for provisional measures such as interim injunctions: in the United Kingdom the so-called Anton Piller order is a very useful measure. By such provisional measures the counterfeit goods may be confiscated and the person who has them in his possession is obliged to inform the genuine trademark owner of their source. 2.501 Since counterfeiting is a phenomenon that occurs in international trade, it is also necessary to empower the customs authorities to check goods at the border of their country and confiscate counterfeit goods at the request of the owner of the trademark affixed to them. Imitation of Labels and Packaging 2.502 The cases discussed in this section lie between normal trademark infringement and counterfeiting, sometimes coming very close to counterfeiting. As in the case of counterfeiting, the label or packaging of the competing product is imitated, but in this case the imitation does not give the impression of being the genuine one. If one compares the genuine product and the imitation side by side, although consumers seldom proceed in this way, one can distinguish them and the imitator does not usually hide behind the manufacturer of the genuine product; he trades under his own name. He is not a criminal, but rather a competitor who uses unfair methods of competition. 2.503 Instead of developing at his own expense a label and packaging with an image of his own for his product, the imitator tries to take advantage of the reputation of the competing product by giving his product an appearance so similar to it that confusion arises in the marketplace. 2.504 Often the imitator uses a trademark (in the sense of a product name) which is confusingly similar to that of his competitor. If he does that he is committing trademark infringement. 2.505 In a number of cases the word mark used by the imitator is somewhat, but not confusingly, similar to the one used by his competitor, but may even be totally different from it. In such situations the confusion in the marketplace arises only, or mainly, from the use of colors and graphic elements that are identical or very similar to those of the competitor’s label or packaging. Labels and packaging are rarely registered as trademarks, which means that trademark law mostly offers no basis for intervention in such cases. They have to be dealt with under the rules of unfair competition.

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2.506 In principle, it is generally recognized as being unlawful (unfair competition) to pass off one’s own goods as being those of a competitor. If a label or the packaging of a product is confusingly similar to that of a competitor’s product, this requirement is normally fulfilled. Change of Ownership Reasons for Change of Ownership 2.507 The ownership of a trademark can change for different reasons and in different ways. 2.508 Trademark rights may, on a natural person’s death, pass to his heir. Such a change of ownership is only possible where trademark laws allow the private ownership of trademarks. Similarly, a trademark may pass to a new owner in the case of bankruptcy. Another automatic change of ownership may result from the merging of two companies. No automatic change takes place, however, in the case of a company takeover effected by the acquisition of shares, or when certain assets of a company, including the intellectual property rights, are acquired. Voluntary Change of Ownership: Assignment 2.509 Assignments are the most common form of change of ownership. They are normally, but not necessarily, part of a purchase contract, whereby trademarks are sold against payment of a certain amount of money. 2.510 The law of some countries allows trademark assignment only together with the goodwill related to the mark. It is argued that consumers are accustomed to the product sold under the trademark, so that an assignment without transfer of the enterprise, or part of the enterprise, using the mark would deceive consumers. Nevertheless, there is a clear tendency towards allowing free assignments of trademarks. Trademarks that are assigned without goodwill have often been unused for many years. Apart from that, companies often have a complicated legal structure and, when one company is taken over by another, it may well be that the trademarks are transferred to the new parent company, while the factories in which the products sold under those trademarks are manufactured, remain the property of the company taken over. As long as the new parent and trademark owner ensures that the consistent quality of the products sold under the assigned trademarks continues, consumers will then not be deceived. 2.511 There is therefore no absolute need to link the assignment of trademarks to the goodwill related to them. 2.512 Partial assignments are more problematic. In order to avoid confusion of the public in such cases, trademark laws sometimes allow transfers only where the goods involved are not similar to those remaining with the former owner. Confusion of the consumer is thus clearly avoided, as the two trademarks could have been registered by different owners from the very beginning.

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Recordal of Change of Ownership 2.513 In principle, a change of trademark ownership takes effect without any recording. This is clear in the case of the foreign owner’s death or bankruptcy or a merger. Even a voluntary change of ownership by means of assignment does not, in principle, need to be recorded to become effective, at least inter partes. Nevertheless, trademark laws generally provide for the recording of changes of ownership for two reasons: the new owner cannot normally exercise his trademark rights if he is not the recorded owner; in principle, the transfer is not binding on third parties as long as it is not recorded.

2.514 This principle cannot be applied without restriction: if the new owner has completed all the necessary formalities, that is, if he has submitted the necessary documents to the office for registration of the change of ownership, he must be able to take action to defend his trademark against infringement. The recording procedure is sometimes very long and drawn-out, and some jurisdictions do not permit recordal of pending applications. In such cases, the new owner would often be totally blocked, as the former owner might no longer exist, or at least might no longer be interested in proceeding against infringements of his former trademark rights. 2.515 Trademark laws generally provide that the registrar refuses to record an assignment that in his opinion is liable to deceive consumers. 2.516 If the assignment really does deceive the consumer, it is usually automatically null and void and therefore cannot be validly recorded. However, the registrar should not refuse to record assignments if in his opinion there is only a risk of confusion for the public. Such cases obviously depend on factual circumstances that go beyond what he knows from the file, such as how the new owner will use the trademark, whether consumers will really be deceived, and so on, which establish that the deception of consumers is not inherent in the assignment. 2.517 A partial transfer is different from the situation where the registered owner of several trademarks assigns some of them which, if the test of trademark similarity is applied, could be regarded as confusingly similar. 2.518 In such a case, deception of the consumer is not really inherent in the assignment. Whether or not the consumer will be deceived depends not only on how the new owner will make use of the trademark assigned to him, but also on how the former owner will make use of the trademark of which he is still the proprietor. The parties to the assignment will usually, in their own interest, include provisions in the contract of assignment that regulate the future use of both trademarks in such a manner as to avoid confusion amongst the consumers involved. In such cases the registrar should not have the power to refuse to record an assignment, and the matter should be left to the discretion of the courts. 2.519 If a trademark assignment is null and void because it inherently deceives the public, or for any other legal reason outside trademark law, but has been recorded, the question that arises is what the consequences of such recording are.

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2.520 Nullity of the assignment does not lead to nullity of the trademark rights as such. The trademark rights do, however, remain with the assignor, the former owner. This means that any use of the trademark by the newly registered owner is not actually a use, and, after the grace period for use of the trademark has expired, the trademark is open for cancellation. Of course, the assignor and former registered owner of the trademark, who has remained the owner, could in fact use it, but he is unlikely to do so as the parties are usually unaware of the invalidity of the assignment. Formalities 2.521 In the interest of legal security, assignments should be evidenced in writing. The application for recording of the assignment must also be made in writing, either by the assignor or by the assignee. If it is the assignor who applies, a simple written request signed by himself or his legal representative should be sufficient. If on the other hand it is the assignee or any other new trademark owner who asks for the change of ownership to be recorded, the request generally needs to be accompanied by supporting documents (the contract of assignment signed by the assignor, or any other proof of the change of ownership). However, in such cases the mere signature of the demand for change of ownership by the new trademark owner or his legal representative should also be sufficient, without any need for authentication, legalization or other certification. The Trademark Law Treaty contains, in Article 11, an exhaustive list of formalities which Trademark Offices may require in respect of an application for the registration of a change in ownership. Trademark Licensing Importance of Licensing 2.522 It is common practice for trademark owners to license third parties to use their trademarks locally in the country where they exercise their own business. However, the main importance of the possibility of licensing the use of trademarks lies in its usefulness in international business relations. Licensing is indeed the principal means whereby the trademarks of foreign companies are used by local businesses. Such license agreements are very common between partners from different developed countries, and they do exist between partners who both originate in developing countries, or even between a licensor in a developing country and a licensee in a developed country. 2.523 The most important role they play, however, is in the relations between licensors in developed countries and licensees in developing countries. In these situations they are not normally simple trademark licenses, but general agreements including the licensing of patents, trademarks, know-how and possibly other intellectual property rights, as well as technical assistance to be given to the licensee. These agreements are a key factor in the economic development of developing countries and are usually characterized by the transfer of technology, the creation of jobs and the use of local raw materials. They are often regulated by special provisions of local laws which provide for the control or approval of the agreement by a local authority, such as a ministry responsible for technology transfer. 2.524 To the extent that such general agreements confer the right to use the licensor’s trademarks, they have to comply with the relevant licensing provisions of the trademark law of the licensee’s country (even though the above-mentioned special provisions may also apply). The trademark laws of many countries contain provisions on trademark licensing. The general guiding

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principles of trademark licensing are dealt with hereunder, independently of its foreign ownership and technology transfer aspects. Basic Concept: Control by the Owner 2.525 To safeguard the origin-indicating function of the trademark, it is necessary and sufficient for the owner to exercise control over the use of the mark by the licensee, particularly with respect to the quality of the goods (compliance with quality standards set by the licensor) and the conditions under which they are marketed. If that control is effective, the registered owner of a trademark need not use it himself. Use of the mark by his licensee can be deemed to be use by himself for all trademark protection purposes. This means more particularly that the trademark cannot be attacked for alleged non-use, and the licensee cannot himself claim ownership rights in relation to the mark. Formal Requirements 2.526 Basically, the trademark protection system does not impose any formalities on trademark licensing. The only important point, which is inherent in the system, is that the owner exercises effective control over the licensee. The importance of this principle is generally recognized, although only a few trademark laws provide for quality control in their provisions on trademark licensing (those of the United States of America and Sri Lanka, for instance). Indeed no purpose is served by the existence of a written agreement, which may even be recorded in the trademark register and which may contain all sorts of control provision, if the law does not provide for the legal consequences of failure to exercise control. Many trademark laws do nevertheless provide for obligatory recording of the license, and often the registrar carefully studies the conditions imposed on the licensee by the licensor. 2.527 In September 2000 the WIPO General Assembly and the Assembly of the Paris Union adopted a Joint Recommendation Concerning Trademark Licenses (see Chapter 5, paragraphs 5.733 and 5.734) which provides a maximum list of indications and elements that an Office may require for the recordal of a license (Article 2(1)) and contains a Model International Form. The Recommendation also attempts to limit the effect of non-compliance with recordal requirements to the license agreement itself by stipulating that non-recordal of a license should not affect (i) the validity of the trademark which is the subject of the license (Article 4(1)), (ii) any right that a licensee might have under the legislation of Member States to join infringement proceedings initiated by the holder (Article 4(2)(a)), and (iii) the question whether use of a mark by a third person can be considered as use by the trademark holder which can be relevant in the context of use requirements (Article 5). 2.528 A special variety of trademark licensing formality is the British system of registered user agreements. If such an agreement is recorded, use of the trademark by the registered user is deemed to be use by the trademark owner. However, it is not the actual license agreement between the parties, governing their commercial relations, that has to be registered; the law provides for a kind of simplified form, with certain conditions to be fulfilled before the registrar recognizes the registered user agreement. Since the register is open to inspection, the parties to a license agreement do not normally register the agreement but rather the simplified form. Restrictions on the Licensee 2.529 Licensees are not usually allowed to assign the license or grant sub-licenses, but such rights can of course be expressly granted in the agreement.

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2.530 Licenses can be exclusive or non-exclusive. 2.531 In the case of an exclusive license the trademark owner is not allowed to license the mark to any other person in the territory and cannot even use the mark himself. 2.532 In the case of a non-exclusive license, of course, the owner may use the mark himself and even allow others to use it. In the case of multiple licenses, very strict quality control is necessary in the interest of the consuming public. 2.533 Exclusive as well as non-exclusive licenses can be concluded for the whole territory of a country or part of it, and they can cover all or some only of the goods for which the trademark is registered. Unlike in the case of assignments, there is no risk of confusion of the public to be considered, on condition that the trademark owner exercises efficient quality control. Trade Names 2.534 Enterprises may own and use one, several or many different trademarks to distinguish their goods and services from those of their competitors. However, they also need to distinguish themselves from other enterprises. For that purpose they will adopt a trade name. 2.535 Trade names have in common with trademarks and service marks that they exercise a distinguishing function. Unlike trademarks and service marks, however, trade names distinguish one enterprise from others, quite independently of the goods or services that the enterprise markets or renders. Legal Requirements 2.536 Countries generally lay down certain requirements to be met for a trade name to be permissible and accepted for registration in the register of company names, which may exist on a national level, but in fact is often kept on a regional or even local level. The character of the enterprise must be mentioned (for instance with the abbreviation Ltd for limited company), and often the purpose of the business has also to be given. Trade names are generally quite lengthy, and are therefore not a very practical tool for use in daily business life as a reference to the company. 2.537 Enterprises therefore tend to use a shorter business name or some other kind of corporate identifier in addition to the full, duly-registered trade name. 2.538 The trade name is not normally required to be distinctive as a condition of registration and subsequent use. Legal Protection 2.539 If a trade name or business name is distinctive it is protected by use, whether registered or not. If it is not distinctive, it can be protected after distinctiveness has been acquired by use. Distinctiveness in this context means that the consuming public recognizes the name as being a reference to a particular trade source.

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2.540 A trade name or a business name can also be afforded protection by registration as a trademark. Usually, both the full corporate name and the short business name can be registered. To safeguard such a registration, it is of course necessary actually to use the trade name as a trademark. This requirement is normally not met by making a reference, somewhere on the label or packaging of a product, to the manufacturing or trading company with its full address in small print, as is often required by labelling regulations. It is therefore more adequate and commoner in practice to register the shorter business name as a trademark, the more so as that name is often at the same time an important trademark (such as the so-called “house mark”) of the company. 2.541 In the same way as enterprises can register trade names and business names as trademarks, they can and often do use them not only to distinguish themselves but also to distinguish the goods or services that they offer and, as mentioned before, this is even necessary in connection with the obligation to use if the name has been registered as a trademark. 2.542 It is therefore inevitable that conflicts between trade names, business names and trademarks arise. If a trade name or business name is used as a trademark (whether registered or not), the general rules of priority and the protection of consumers against confusion as to the origin of the goods or services offered under the signs concerned will determine the outcome of any conflict with a similar trademark. 2.543 Even if an enterprise uses a business name or trade name as such, in other words not as a trademark for the goods or services it offers, it is nevertheless widely recognized that a prior trademark is infringed if the use of the business name or trade name is likely to create confusion as to the origin of the goods or services that the enterprise offers under its name. Conversely, the use of a trademark, service mark or collective mark can in the same way infringe a prior (registered or unregistered) business name or trade name. Franchising Introduction A Brief Explanation of Franchising 2.544 Even if the term “franchising” is unfamiliar to most consumers, they are familiar with the results of franchising. The most widely known results of franchising appear to be fast-food restaurants, hotels or cosmetic retail shops. Franchising extends, however, to industries as diverse as the hiring of formal wear, car tuning, the preparation of taxation statements or returns, lawn care, day-care schools and dentistry. In short, it may apply to any economic activity for which a system can be developed for the manufacture, processing and/or distribution of goods or the rendering of services. It is this “system” that is the subject matter of franchising. 2.545 In developed market economy countries, the sale of goods and services through franchising has grown remarkably since the 1950s, and can account for a very large proportion of all retail sales in certain countries. 2.546 This rapid growth and success of franchising has been attributed to a number of factors, the most basic one being perhaps that franchising combines the depth of knowledge and the strength of one entity, the franchisor, with the entrepreneurial spirit of a businessman, the franchisee.

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2.547 Whether there is government-mandated regulation of franchises or not, as in all commercial activities, the best protection against the possibility of abuse is the knowledge held by potential franchisees and their professional advisers as to what franchising is and how it works. Accordingly, the purpose of this chapter is to give a brief general survey of the structure and nature of a franchising arrangement and, in particular, to help prospective franchisees understand franchising and better defend their interests, thereby allowing franchising to fulfill a positive role in the economy. This chapter should not, however, be viewed as a substitute for expert advice on the subject. An Example of a Franchising Agreement 2.548 In order to illustrate better the discussion on franchising, this chapter uses a fictional franchise from time to time as an example—a restaurant selling Italian food and operating under the name of VESPUCCI. While VESPUCCI is the mark (both for goods and services) and the trade name under which the franchisees operate the restaurants, the company offering the franchise (the franchisor) is referred to as Vespucci, Inc. 2.549 Vespucci, Inc. has developed a system for preparing and selling its food products, which are sold in large volume and in a uniform manner. The system includes various factors that contribute to the success of VESPUCCI restaurants, including recipes and methods of preparing food that produce a product of consistent quality, good seating in the restaurant, the design of employees’ uniforms, the design of the buildings and billboards, quality sources for supplies, the design of packaging, an inventory of ingredients used in the preparation of the food, and management and accounting systems. 2.550 Vespucci, Inc. imparts its knowledge and experience to its franchisees to assist them in developing a new business. Without the franchisor’s guidance, the local restaurant owner is liable to make serious mistakes which could cause the business to fail. Moreover, Vespucci, Inc. retains the right to supervise and control the way in which the local franchisee is operating the local VESPUCCI restaurant, so that the goodwill of the VESPUCCI mark and trade name is maintained and the value of the local restaurant, indeed of the whole system under which VESPUCCI restaurants are operated, is not reduced. 2.551 Vespucci, Inc. receives a financial benefit in exchange, in the form of a payment by the local franchisee to Vespucci, Inc. That payment may include an advance payment or “up-front fee” and some form of continuing payment based, for example, on a percentage of the franchisee’s total sales. Payment in kind might also be envisaged. In addition, depending on the nature of the agreement, the franchisee may have a number of other payments to make for items such as special food spices, rental of equipment (e.g. ovens, cutting machines, etc.), purchase of consumable goods and miscellaneous articles necessary for his business. Comparison of Retail Sales, Standard Licensing and Franchising Arrangements 2.552 Business transactions can take a variety of forms; franchising arrangements are only one of them. In order to understand what a franchising arrangement is, it may be useful to discuss first two other types of business arrangement which, while different from franchising, share with it certain important features: retail sales arrangements and standard license arrangements.

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Retail Sales Arrangements 2.553 Retail sales arrangements are governed by the traditional principles of civil and commercial law, such as contract law. The manufacturer or distributor makes a profit by selling his products to the retailer at a sufficiently high price. 2.554 A retail sales arrangement involves one party that manufactures and/or distributes a product and a second party that sells it. The seller may be an agent of the manufacturer or may be an independent merchant, purchasing the goods for resale. If the seller is an independent merchant, he may have concluded a “distributorship” agreement with the manufacturer or distributor of the goods. If the distributorship is exclusive the merchant is assured that the manufacturer or distributor will deal only with him for the purposes of distributing those goods within the territory (e.g. a province, a region or a whole country) defined in the contract. The exclusive distributor would normally be entitled to announce his special relationship with, and use the marks and trade names of, the manufacturer or distributor for the purposes of advertising and selling the goods. 2.555 Although exclusive distributorships exist, distributorships are typically non-exclusive. From this viewpoint, a franchising arrangement may be more attractive. Standard License Arrangements 2.556 In its simplest terms, a standard license arrangement is one under which one person (the licensor), who is the owner of a right to prevent other persons from commercially exploiting or using certain intellectual creations (e.g. inventions, designs) or distinctive signs (e.g. marks, trade names), agrees not to exercise that right against a given person (the licensee) in exchange for a fee, and perhaps also subject to the licensor’s control of such commercial exploitation or use. In the case of license agreements involving marks or other distinctive signs, the licensor will not normally exercise any more control over the licensee than is necessary to ensure that the goods being sold, or services provided, under his sign are of a certain quality, and/or that they possess certain specified characteristics. Franchising Arrangements 2.557 Although different definitions could be proposed, franchising may be described as an arrangement whereby one person (the franchisor), who has developed a system for conducting a particular business, allows another person (the franchisee) to use that system in accordance with the prescriptions of the franchisor, in exchange for compensation. The relationship is a continuing one, as the franchisee operates in accordance with standards and practices established and monitored by the franchisor and with his continuing assistance and support. 2.558 The franchising arrangement therefore relates to a system, which the franchisor allows—or licenses—the franchisee to exploit. This may be referred to as the franchised system, or simply “the system.” The franchised system is a package comprising intellectual property rights relating to one or more marks, trade names, industrial designs, inventions and works protected by copyright, together with relevant know-how and trade secrets, to be exploited for the sale of goods or the provision of services to end users. 2.559 The factors that typically characterize a franchise relationship include the following features. 2.560 A license to use the system: In return for an agreed payment, the franchisee is allowed to use the franchised system. He is in effect given a license to use the franchisor’s system to carry out

that would be franchising.566 For example. intellectual property rights. Moreover. under a franchise arrangement. decides to establish a system including store design and marketing techniques for the sale of its pens and to allow someone to make use of that system to sell FLUME pens. the ongoing interactive relationship and the following of a prescribed manner of operation.562 The franchisor’s right to prescribe the manner of operating the business: The franchisee agrees to abide by directives issued by the franchisor which set out the manner of operation of the system. Desk Gear. In contrast.563 The preceding discussion identified three distinguishing characteristics of a typical franchise arrangement: the license to use the uniform system. Grant of a License to Use the Franchised System 2. because it is a license to use a system that includes. If. These characteristics may be used to compare a franchise arrangement with a retail sales arrangement and a standard license arrangement. The franchisee for his part has a continuing obligation to pay fees to the franchisor for the use of the franchised system or to compensate the franchisor for providing ongoing management services. maintaining and promoting the franchised unit. Such directives may include quality control. however. Where the franchised system is to be exploited at a particular location. In practice. businessmen prepared to engage in franchise arrangements are generally less concerned with the precise legal form of the agreement than with the business aspects of the deal. with the franchisor giving continuous assistance to the franchisee in establishing. but is not limited to.561 An ongoing interactive relationship: The relationship is ongoing. (a fictional example) of the manufacture and sale of pens bearing the FLUME mark can be considered a standard license agreement. to use the franchised system.” 2. Law and Use his business. franchise arrangements may also take a “hybrid” form. granted by the franchisor to the franchisee. 2. . Franchising goes further by allowing the franchisee to manufacture and sell goods or provide services as part of a larger system. the franchisee does more than merely selling goods or providing services under another’s mark. This includes updating the relevant information as the franchisor develops new or better techniques for operating a franchised unit. protection of the system.100 WIPO Intellectual Property Handbook: Policy. Comparison of Types of Arrangement 2. operational details and a host of other regulations governing the conduct of the franchisee in relation to the franchise. a retail sales arrangement involves the simple sale of goods and does not necessarily require the grant of a license. It has been stated that franchising is merely a sophisticated form of a standard license arrangement and that a franchising arrangement goes beyond the mere licensing of one or more specific intellectual property rights. territorial restrictions. such as at a franchised restaurant or shop. 2. that location is usually referred to as the “franchised unit. Indeed. Inc.564 The heart of a franchising arrangement is a license. This is essential to allow the franchisee to conduct his business in the manner developed by the franchisor. Inc. 2. involving multiple sales of the franchised product (or offering of franchised services) over a period of time.565 In this regard the distinction between a franchise arrangement and a standard license arrangement is a more subtle one. the licensing by Desk Gear. although he might not himself do any manufacturing at all. borrowing features from two or more types of contract. such as trademarks.

who becomes a permanent “customer” of the franchisor by agreeing to acquire from him certain goods needed for the operation of the franchise. the seller does not exercise control over the manner in which the goods are sold by the buyer to the end user. the manufacturer and the distributor are usually independent of each other. In addition. but also prescribe the manner in which the fundamental aspects of the franchised system are implemented and managed.571 Specifically with respect to a franchise arrangement. at least part of the ongoing nature of the relationship presupposes the franchisor continuing to develop the franchised system and communicating the new developments to the franchisee. in particular.567 In a retail sales relationship. in return. the legal systems of some countries require license contracts to contain provisions requiring quality control by the licensor and such provisions are essential under the legal systems of many countries to enforce and avoid the loss of rights in licensed marks. the parties are independent but have a close working relationship defined by the terms of the license agreement and franchise agreement. This will. thereby making its own profit. which may be referred to as business format franchises.572 This chapter deals with only one general category of franchises. Ongoing Interactive Relationship 2. the franchisor explains to each franchisee how to make use of the system and. the owner of the mark will normally exercise some sort of control over the quality of the goods or services produced or offered under the license. acquires income by receiving a portion of the franchisees’ income. assure the licensor that he can prevent any damage to his mark’s goodwill due to diminishing or inconsistent quality of the goods or services produced or offered by the licensee.Chapter 2 . the first party manufactures the goods and transfers them to the second party at a price which includes its profit and the second party resells the goods at a higher price. straightforward franchising relationship.568 In a retail sales arrangement. In a standard licensing arrangement and in a franchising arrangement. 2. In a license arrangement that gives the licensee consent to use the licensor’s mark. such as trademark rights. comprises a number of variations. to improve and promote the system. With respect to marks.570 In a retail sales arrangement.Fields of Intellectual Property Protection 101 2. . the franchisee’s success is also dependent on the franchisor’s ability to develop a profitable system.569 In contrast to a standard license arrangement. the franchisor will supervise not only the manner in which specific rights. to train the franchisee in the proper operation of the system. The more successful the licensee’s or franchisee’s business becomes. Therefore. of course. are used by the franchisee. however. the franchisor may ensure income by selling goods to the franchisee. the scope and content of the license granted. The income of each party is dependent on the combined efforts of both parties. for instance a percentage of sales. Such variations may consist of changes in the nature of the franchised system. to supervise or monitor the franchisee and to assist him during the term of the franchise agreement in order to enhance the likelihood of success. the nature or object of the ongoing relationship and the scope and degree of supervision exercised by the franchisor over the manner in which the franchise is exercised. 2. In a typical. This broad category. the extent of the franchisor’s influence over the franchisee is greater than that of a licensor over a licensee. the greater the income for both parties. In a franchise arrangement. Types of Franchise 2. Following the Prescribed Method 2. respectively.

The franchisor will grant the franchisee authorization to manufacture and sell products under the marks of the franchisor.579 Unit franchising is the most straightforward way in which franchising can be carried out. a brief description of certain basic types of business format franchises is useful.576 In a service franchise. Structures for Carrying out Franchising 2. Franchises could also be categorized in terms of the possible relationship existing between franchisor and franchisee. under the terms of the franchise agreement.577 In a distribution franchise.575 In a processing franchise. Categorizing franchises on the basis of their function yields three principal types: processing franchises. distribution franchises and service franchises. For example. the resources of the franchisor. and its relative importance to the franchisor). wholesaler and retailer and service industry and retailer. manufacturer and retailer. sometimes called a “manufacturing” franchise. Several factors should be taken into consideration. operating manuals and standards. or the provision of credit card services.573 A business format type of franchise has been described as being characterized by an ongoing business relationship between franchisor and franchisee that includes not only the product. the size and resources of the master franchisee or franchise developer. the nature of the market to be served (including its location. 2. service and trademark.102 WIPO Intellectual Property Handbook: Policy. to his customers. the franchisor develops a certain service which is to be rendered by the franchisee. because it involves direct relations between the franchisor and the franchisee. the franchisor (or someone else on his behalf) manufactures the product and sells it to the franchisees. whereby the franchisor enters into a franchise agreement directly with the franchisee. . foreign or domestic. 2.574 In order to perceive more clearly the potential of franchising. An example of a service franchise would be one involving the provision of automobile tuning or repair services. cosmetics or consumer electronics can be carried out under franchises. Law and Use 2. Such franchises are common. and continued two-way communications. the franchisor supplies an essential ingredient or technical knowledge to a processor or manufacturer. In certain instances the franchisee may further be licensed to use trade secret information or patented technology held by the franchisor. distribution and servicing of the product. under the franchisor’s trademark. apart from which he may be provided with training and/or information relating to the marketing. 2. including: the franchisor’s reasons for franchising. but the entire business format itself—a marketing strategy and plan. in the restaurant and fast-food industry. In domestic situations— where the franchisor and franchisee are in the same country—unit franchising is the most commonly used structure. for example. The franchisees then sell the products to customers.578 Making a choice between the different possible structures depends very much on the particular circumstances of the franchisor and the franchisee and the nature of the franchise. These include relationships like those between manufacturer and wholesaler. Unit Franchising 2. 2. in their own geographical areas. the distribution of automobile fuel. quality control.

shops or outlets. however. These two forms are discussed below. Typically. The subsidiary would then act as the franchisor.581 The alternative to establishing such a local presence is for the franchisor to establish within his own organization the expertise that will enable him to adapt his franchise to the needs of each of the local markets in which he wishes to operate. linguistic. over an agreed period of time. the use of the franchised system by franchisees can be controlled.580 However. or to engage in multiple-unit franchising through a local subsidiary or a joint venture.583 The type of structure chosen for a franchise agreement may have a bearing on the manner in which a franchisee or a master franchisee is legally organized. 2. for a particular purpose. .” Two forms of territorial franchises are the “franchise developer agreement” and the “master franchise agreement”. the joint venture partner is a local individual or enterprise chosen by the franchisor as a partner for his experience in local customs and business. where the franchisor and franchisee are located in different countries. The formation of a joint venture can sometimes provide security for the owner of the intellectual property rights because. cultural. which is not to divert resources to establishing business operations abroad. it significantly increases the administrative burden. granting franchises to one or more local franchisees.584 In international franchising. The franchisor will actively participate in the joint venture entity to carry out the franchise. a joint venture is a form of alliance of two separate companies. 2. in other words the type of legal entity that it is. This would require the existence of a subsidiary entity. and the franchisor shares the management of the joint venture with his partner. labor.585 Unlike a subsidiary.Chapter 2 . Territorial Franchises 2. While this approach maximizes the franchisor’s supervision of the way in which the franchise is implemented. The exact form of the joint venture. possibly constituted as a local company. that in a franchise agreement any manner of legal organization or corporate form may be used. where the local master franchisor is a subsidiary of the franchisor.582 Franchise agreements which aim at covering a substantial territory or geographical area by setting up. 2. simultaneously or successively. tax. particularly in connection with the establishment of international or cross-border franchise agreements: subsidiaries and joint ventures.Fields of Intellectual Property Protection 103 2. with the franchisor involved in the management of the joint venture entity. commercial. in the country in which the franchisor wishes to operate. of operating in other countries and would detract from one of the major advantages of franchising. depending on business considerations and the applicable legislation—in particular. depends on the wishes of the parties to the joint venture and on national law. It should be noted. The companies agree to act together. legal. foreign investment and competition law. 2.586 A phenomenon that is unique to joint ventures is the relationship with the franchisor’s joint venture partner. 2. Two organizational forms should be mentioned. the latter will have direct control over the network of franchisees. and hence the cost. while still securing the necessary local input. which may be combined. typically forming a separate legal entity. political and economic differences between the countries may make it necessary to establish a local presence in the franchisee’s country in the form of a master franchisor. may be referred to as “territorial franchising. a number of units.

591 This approach to franchising is particularly important in international franchising.594 The terms of a typical franchise agreement must conform to the appropriate national laws. is often regulated by provisions in the master franchise agreement. rights (which may be exclusive) for a given geographical area. The master franchisee is given the right. the master franchisee.593 A franchise agreement may be based on a combination of the structures mentioned above. .589 In a master franchise agreement the franchisor grants another party. in which case the sub-franchise agreement is called a “multi-unit franchise.588 Generally this agreement will include a schedule setting out the time frame for establishing the franchise units and developing the assigned territory.104 WIPO Intellectual Property Handbook: Policy. to exploit fully the potential business opportunities in the larger geographical area. combine a master franchise. specifying the latitude that the master franchisee has for making alterations to the franchised system in order to accommodate local needs. 2. usually called “sub-franchisees”. but even where this is not the case. where a franchisor may wish to establish franchise operations in a given country. by the franchisor. with a franchise developer agreement under which the same master franchisee. Combined Structures 2. it may simply be a choice of business strategy. It may. Law and Use Franchise Developer Agreement 2. in the country in which a master franchisee is established. to grant franchises to third parties. The individual units opened by the franchisee under this type of structure would not have independent legal standing.592 The franchisor’s degree of control over the manner in which the franchise is implemented. usually called the “master franchisee”. 2. who is expected to open and operate several units. A master franchisor could also be mandated to conclude franchise development agreements with one or more of the independent franchisees under the master franchise. This franchise will include a “development agreement” whereby the franchisee is required to develop the assigned territory by establishing a number of franchise units or outlets which he will usually own directly. In this case the franchisee will not sub-franchise out to third parties.587 A franchise developer agreement links the franchisor directly with the franchisee.” 2. or one of his sub-franchisees. and could be divisions or branches of the franchisee’s enterprise. and cover the rights and obligations of both franchisor and franchisee. in situations where that geographical area is remote from or little known to the franchisor.590 A master franchise agreement allows a franchisor to delegate the exploitation of a geographical area to another person. Typical Provisions in a Franchise Agreement 2. for example. in which he may have no business experience. 2. It may be agreed that some of those sub-franchisees will run more than one franchise unit. under which a number of independent sub-franchisees will be established. or where it is found to be convenient for business strategy purposes. Master Franchising 2. is additionally committed to open a number of his own units in the same territory.

2. for example. for example. McGyver or Columbo with respect to television series or Bambi with respect to motion picture cartoons). training. with respect to movies. sportsmen). famous personalities in the film or music business. such as provisions on breach of agreement.T. a tale or a strip cartoon (for example. assistance with opening the franchised establishment. transfer of agreement and termination. obligations may include the provision of an operating manual. image. the character Tarzan in the novel entitled “Tarzan. 2. the term “character” covers both fictional human beings (for example.” Such a character may appear in a novel. obligations include the payment of fees.598 In the context of the merchandising of characters. Donald Duck or Bugs Bunny) and real persons (for example. Sources and Primary Use of Characters 2. the character may. The more general terms to be found in other types of agreements.Fields of Intellectual Property Protection 105 2. Mona Lisa by Leonardo da Vinci. also have their particular application between franchisor and franchisee. the Lord of the Jungle”. it is mainly the essential personality features easily recognized by the public at large which will be relevant. compliance with quality control requirements. strip cartoons (such as Tintin by Hergé or Astérix by Uderzo and Goscinny). and possibly the provision of a step-by-step schedule for the development of the franchise. it can in most cases be referred to as an “entertainment function.Chapter 2 .597 Broadly speaking.595 On the franchisor’s side. and in fact often does originate in a literary work (such as the character Oliver Twist by Charles Dickens) or in a strip cartoon (such as the character Batman). Character Merchandising The Notion of Character Definition 2. 2. Those personality features are. Burroughs). the panda of the World Wide Fund for Nature (WWF)). for example.600 It should be noted that. On the franchisee’s side.596 Competent professional advice should be sought in the context of the aims and particular circumstances of a given franchise agreement. appearance or voice of a character or symbols permitting the recognition of such characters. observance of an agreed degree of confidentiality and of exclusivity. King Kong. and continued support. in the case of cinematographic works. the character . 2. Rambo or E. in order to achieve the most appropriate and balanced relationship between the parties. or drawings. the name. Tarzan or James Bond) or non-human characters (for example.601 As regards the primary use of a fictional character. artistic works (such as paintings.599 The main sources of fictional characters are: literary works (such as Pinocchio by Collodi or Tarzan by E.R. cinematographic works (such as Crocodile Dundee.

2. where the character is a real person. may organize by means of contracts the “survival” of the character in new stories (for example the books featuring James Bond after the death of Ian Fleming). 2. Hergé. for example. where it is seldom the creator of a character (the maker of the original drawings or scripts) who makes the primary use. and the success gained by the work depicting the character generally leads to new stories. characters which are closely linked to a certain company (such as the “Michelin Man”. where a character has reached a high degree of reputation and the creator has died.604 Character merchandising can be defined as the adaptation or secondary exploitation. Generally.e. image or appearance) of a character in relation to various goods and/or services with a view to creating in prospective customers a desire to acquire those goods and/or to use those services because of the customers’ affinity with that character. on the contrary. The various property or personality rights vesting in the character will be the subject of contracts (such as transfer or license agreements or product or service endorsement agreements) enabling one or several interested third parties to be regarded as authorized users of the character.” The difficulty with real persons is that actors.” This will concern.602 In other cases. by the creator of a fictional character or by a real person or by one or several authorized third parties. the creator of Tintin). The situation is somewhat different in the case of cinematographic works. the primary uses of a fictional character can sometimes be referred to as “promotional. for example. 2. one should speak of “primary activity” in preference to “primary use. such as the “little man” character created by Charlie Chaplin. In the case of real persons. advertising and recognition functions.603 The main sources. the primary use will not originate from the creator of the character. . the label attached to a perfume bottle bears the name of an actor or actress. to a certain product (such as the character Johnnie Walker to a Scotch whisky) or to a given event (such as the mascots used to personalize Olympic Games or World Cup football). and activities. or the holders of the publishing rights. i. Other creators.606 The following examples of character merchandising can be given: a toy is the three-dimensional reproduction of the fictional character Mickey Mouse. products or services. are the movie and show businesses and sporting activities. The Concept of Character Merchandising Definition 2. although. the heirs if any. the real person is only referred to under the name of the character portrayed (see developments below on the types of character merchandising).605 It should already be emphasized that the person or legal entity which will organize the merchandising activity (the merchandiser) will very seldom be the creator of the fictional character or the real person concerned. Law and Use Mr. of the essential personality features (such as the name. In some cases. 2. Those characters are created with a view to popularizing legal entities.106 WIPO Intellectual Property Handbook: Policy. the Exxon (Esso) tiger or the Peugeot lion). Brown in the tale entitled “Squirrel Nutkin” or the characters named James Bond or Tintin). a T-shirt bears the name or image of fictional characters. but exceptions do exist. may enjoy a reputation both as persons and as the character they may have portrayed in a movie or television series. the person entrusted with the task of creating the character. Such primary use will be made by the creator of the character. may wish that the characters they have created should not be the subject of new stories after their death (for example.

decided to create fictional characters which would be represented on the goods.608 Of course. Kay Kamen. a third hybrid category exists which is generally referred to as “image merchandising. 2. movie and show-business personalities authorized.610 The range of goods or services covered by “merchandising” expanded considerably in the 20th Century. It involves the use of the essential personality features (name. Furthermore. the packaging or any documents and would be used to generate secondary exploitation for functional or ornamental goods such as decorative plates. etc. Types of Character Merchandising 2. succeeded in granting an important number of licenses for the manufacture and distribution of low-priced mass market merchandise (posters. drinks). 2. badges.614 Originally.Fields of Intellectual Property Protection 107 - an advertising movie campaign for a drink shows a pop star drinking it. clocks. some industrialists. character merchandising can probably be dealt with in a single category. political. with a view to popularizing the goods they manufactured. the religious characters of “Ramayana”. toys.) of fictional characters in the marketing and/or advertising of goods or services. character merchandising originated and was initiated in the United States of America in the 1930s in the Walt Disney Studios in Burbank (California). developed as a means of exploiting the popularity of cartoon characters. since the scope and duration of legal protection may vary according to the subject involved. and. for example in the United States of America. image. Vishnu and Sita.611 From a commercial or marketing point of view. articles of clothing. for example.609 This phenomenon developed rapidly during the 20th century. but the reasons were not directly commercial. puppets or toys.612 Two main categories exist depending on whether the merchandising involves the use of fictional characters or of real personalities (generally referred to as “personality merchandising”). Between those two categories. to the surprise of most. it concerns at least 29 of the 42 classes of the International Classification of Goods and Services established by the Nice Agreement. for example in France.. A Brief History of Character Merchandising 2. However. drawings of attractive figures and the like. puppets. 2. one of its employees. established a department specialized in the secondary commercial exploitation of those characters and. Such cartoon characters originated: . the idea of secondary exploitation of the reputation of a character existed before the twentieth century. When this company created its cartoon characters (Mickey. from the legal point of view it is important to differentiate between the various subjects of merchandising. the practice of character merchandising. Donald). 2.Chapter 2 . the character Pierrot Gourmand (a famous mark for lollipops) or the Michelin Man of the tire manufacturer. T-shirts. 2.607 As an organized system. etc. In South East Asia. buttons. the reproduction of their names or images on articles of clothing (so-called “tie-in advertising”).” Merchandising of Fictional Characters 2. such as Prince Rama. have for centuries been represented in the form of sculptures. as an organized system of promotion. Minnie. for example.613 This is the oldest and the best-known form of merchandising. In the 1950s. in more recent times (late 19th century).

In those cases. in a cartoon character created mainly for the purpose of merchandising and not.) or three-dimensional reproduction (dolls. in a puppet or doll character designed for a film or a television show (for example. The second form occurs where specialists in certain fields. but rather the name or image that it bears is the main marketing and advertising vehicle. such as famous sports or music personalities. T-shirts. Pluto) or for comic strips (Tintin.617 This category can be subdivided into two forms. it is not so much the product which is of principal importance to the consumer. The following examples can be . image and appearance of the character. Examples are advertising for tennis shoes or rackets by a tennis champion. 2. As indicated above. members of a royal family). there is a complete association and the real person is referred to and known by the name of the character.) Personality Merchandising 2. Law and Use - in a literary work being adapted to the cartoon form (for the purpose of a movie or a comic strip) such as the characters Pinocchio or Alice in Wonderland. the public sometimes finds it difficult to differentiate the actor (real person) from the role he plays (character portrayed). badges. Sometimes. Donald Duck..615 Character merchandising with cartoon characters involves mainly the use of the name. the real person whose attributes are “commercialized” is well known to the public at large. advertising for an energy drink by a cross-country runner or advertising for high-fidelity equipment or musical instruments by a pop star. - - 2. image (in two or three dimensions) or symbol of a real person. The appeal for the potential consumer is that the personality represented endorses the product or service concerned and is regarded as an expert.T. such as sports competitions). stickers. key rings. originally for films (Mickey Mouse. appear in advertising campaigns in relation to goods or services. etc.618 This is the most recent form of merchandising. In general. in the marketing and advertising of goods or services. scarves. the numerous mascots created and used in respect of various events. the true identity of an individual) in the marketing and/or advertising of goods and services. Astérix. merchandisers believe that the main reason for a person to buy low-priced mass goods (mugs. persons connected with other fields of activity may be concerned (for example.108 WIPO Intellectual Property Handbook: Policy. etc. The appearance may involve two-dimensional reproduction (drawings. It involves the use of fictional film or television characters.) is not because of the product itself but because the name or image of a celebrity appealing to that person is reproduced on the product. in a work created as a cartoon character. the Gremlins or the Muppets). played by real actors. This form relates mainly to famous persons in the film or music industries. Batman). later reproduced or adapted as a cartoon for advertising and merchandising purposes (the character Zorro or even a real creature such as the shark in the film “Jaws”). Image Merchandising 2.616 This more recent form of merchandising involves the use of the essential attributes (name. voice and other personality features) of real persons (in other words. etc. the character E. originally. The first form consists in the use of the name. however. intended for a movie or comic strip (for example. this is the reason why this form of merchandising has sometimes been referred to as “reputation merchandising. from a commercial point of view. image.” In fact. Snoopy. However. in a film character.

In the case of the latter. etc. a T-shirt bearing the image of R.” 2. the literary characters Pinocchio or Cinderella adapted to the cartoon form by the Walt Disney Company). . a great number of possibilities for the creation of adaptations (derivative works).619 In the context of copyright. For example. dolls.620 Furthermore. Some famous artistic figures have been widely merchandised once they have fallen into the public domain. it has also been the subject of multiple transformations (cartoons. the notion of adaptation is very important. and still is. 2. Furthermore. 2.D.621 The multiplicity of communication media offer. Frankenstein’s monster by Boris Karloff and Tarzan by Johnny Weissmuller. Laurel and Hardy.623 Three-dimensional works (mainly sculptures. the famous Mona Lisa (La Gioconda) by Leonardo da Vinci has been. As regards personality merchandising. mineral water. it should be noted that. Anderson would be referred to as a “McGyver T-shirt”. while packs of dairy products reproducing the image of R. caricatures. the relevance of copyright is primarily in the sphere of photographic works. which may be original works or original adaptations of two-dimensional or audiovisual fictional characters. but generally it may be exploited by anybody. from television series. dolls. Anderson would mention the name McGyver. the Pinocchio and Cinderella cartoons by the Walt Disney Studios are probably better known to children than the original stories.Fields of Intellectual Property Protection 109 given to illustrate this notion: from the film industries. the cartoon character Donald Duck). fancy photographs. Convention reads as follows: Article 2(3) of the Berne “Translations. will generally enjoy copyright protection independently of the work in which they appear if they meet the required criteria. cinematographic works. or the character McGyver played by Richard Dean Anderson. Forms of Legal Protection Copyright 2. arrangements of music and other alterations of a literary or artistic work shall be protected as original works without prejudice to the copyright in the original work. diaries). the purchasing of such product giving the possibility of winning secondary “McGyver” products such as T-shirts or travel bags. it should be emphasized that a work which is original is not necessarily new. used on various goods or their packaging (postcards. 2. mainly in the case of cartoon strips and animated cartoons. The same will apply to the drawing of a common creature (for example. adaptations. puppets or robots). written by Collodi and Charles Perrault respectively).622 Drawings or cartoons (two-dimensional works) may be protected independently if they meet the substantive requirements of copyright protection. For some goods or services a fictional character may be the subject of a monopoly (through trademark protection). the Marx Brothers. In that respect.Chapter 2 .). chocolate or fruit boxes. works of drawing and photographic works.D. at the present time. pamphlets and other writings. the most relevant aspects of the merchandising of fictional characters and of image merchandising are books. alcoholic beverages. since a graphic adaptation of an already existing literary character (whether or not he has fallen in the public domain) may qualify for copyright protection (for example. Columbo played by Peter Falk. card games. copyright protects each different original pose adopted by the character. Many film adaptations are probably more well known than the novel or short story on which they were based (for example.

an actor has some rights if the law of the country of which he is a national provides for performers’ rights.624 Audiovisual works including fictional characters (films. under certain conditions (mainly of a substantive nature) be registered as marks. as a whole (image and soundtrack). the question seems more debatable.627 The essential personality features of a fictional character may.626 The question is probably more debatable in respect of photographic works. because copyright does not vest in the real person concerned but in the person who created the work in which the essential personality features of a real person appear. copyright belongs to the author. in the context of merchandising. there are some exceptions such as the cartoon characters of Walt Disney or the literary characters of Beatrix Potter. in the case of a film or television series. 2. drawing or painting representing a real person. In any case. Trademarks and Service Marks (Marks) 2. generally enjoy copyright protection if they meet the required criteria. the commissioning party has usually a right to prevent the making of copies of the photograph or its being shown in public. Producers of Phonograms and Broadcasting Organizations. forms of protection other than copyright are available for the control of the commercial use of photographic works. The reply will depend on who owns the copyright. as a performer. Copyright protection may extend to the individual visual attributes or to the physical or pictorial appearances (costumes.628 In countries where rights only result from registration. disguises or masks) of a fictional character. delays should be as short as possible since the public’s recognition of many characters and their popularity are of limited duration.625 The relevance of copyright protection in the case of personality merchandising is limited. and it will therefore be difficult for them to acquire trademark rights in a fictional character because they will not themselves be dealing with . For example. such stage names as the Beatles and the Rolling Stones with their respective “Apple” and “Tongue and Lip” logos). film frames or stills) will. Another way for a real person to protect his name is to obtain registration of the nickname by which he is known. the copyright belongs to the artist. in the latter example. mainly with respect to the image (portrait). photographs. This will be all the more probable since audiovisual fictional characters will often have “started life” as drawings (storyboards or strip cartoons) or been described in a literary work. in the pop music area. In the context of merchandising.629 Some of the conditions of form to be met by a mark which is the subject of an application will have an important impact in the context of merchandising. the trend has been to adopt stage names and personalized logos which may be more easily registrable (for example. 2. If a photograph is commissioned for private and domestic purposes. or if that country is party to the Rome Convention of October 26. the copyright in the work belongs to the person who made it possible for the work to be made and who supervised and directed the work of the actors—the author or film producer. However. A final problem relates to the case where the party commissioning the work is not the person who is the subject of the photograph. however. As regards the essential personality features of a real person.110 WIPO Intellectual Property Handbook: Policy. 2. In most cases the author of the photographs (or more accurately of the negatives) will own the copyright. in the case of a sculpture. is the time needed to obtain registration because. 2. 1961. video games. However. Generally. Law and Use 2. One of those conditions which exists in a few countries concerns the relation which should exist between the goods or services to which the mark applies and the business of the owner of the mark. the main impediment. for the Protection of Performers. in the case of a biography. neither a merchandising agency nor the creator of a character will themselves be engaged in the manufacture or marketing of secondary products.

However. 2. may obtain the registration of his name or appearance as a mark in some countries. brooches.637 Industrial design protection is mainly relevant for cartoon characters represented in the form of aesthetic designs for three-dimensional articles which mainly belong to the toy or costume jewellery areas (dolls. or the person or entity entitled to act in his name. continue to use their names. “pins”) which generally originate in cartoons. three-dimensional configurations of goods (applied for in the form of two-dimensional graphic representations) are in principle not accepted for registration as trademarks in many countries. Furthermore. the latter. since it is more and more widely recognized that a mark can be applied to an unlimited number of goods or services. neither generic nor descriptive in respect of the goods or services covered. 2. Industrial Designs 2. the activity carried out by a licensee will not be considered as business generated by the licensor. unless the registered mark concerns a well-known personality and/or trade name and the other persons intend to take advantage of the reputation of the registered mark by parasitic means.636 In countries where proof of use is required in order to obtain protection.Chapter 2 . since design protection is often subject to registration. the use made by authorized users such as licensees or merchandisers is considered as use of the mark made by its holder. a design application will be helpful to establish prima facie evidence of ownership as from the date of the application.634 A number of countries have a more favorable approach. 2. robots. 2. where a surname (which can also be a trade name) is registered as a mark. although effective protection will only commence on the date of registration of the design.632 Further conditions are of a substantive nature. 2.Fields of Intellectual Property Protection 111 the goods or services. In other countries the acquisition of a secondary meaning can remedy the inherent lack of distinctiveness of the essential features of a fictional character.633 In some countries. puppets. mainly when a character has been created with the intention of being industrially exploited. The relevance of design protection will be of importance notably when copyright protection is excluded or reduced.635 As regards the essential features of a real person. Furthermore. unless the latter becomes joint owner of the licensee’s business. Furthermore.630 The modern trend is more favorable however. . independently of the true activity of the applicant but notwithstanding the provisions which may exist with respect to the non-use of a registered mark. however. under certain conditions. except where the trademark has acquired secondary meaning in connection with the goods. a mark should not be misleading to the public or contrary to public order or morality. 2. It is this provision which is most relevant to holders engaged in merchandising programs. 2. in other words. the exclusive right of the holder may be limited.631 In view of the “aesthetic functionality” doctrine (mainly in the toy or doll area) or the “primarily functional” external appearance of goods. distinctiveness alone is not sufficient and the personality features of a fictional character will be registrable as marks only if they have acquired a secondary meaning. action figures. since other persons bearing the same name may. but which may sometimes represent real persons. One of the main conditions is that a mark should be distinctive. and most names and appearances of fictional characters are considered fanciful and therefore sufficiently distinctive.

of course. will determine the consumer’s choice. supplement the protection which may be available within the scope of intellectual property in its broadest sense (including marks.642 Growing recognition of the expansion of industrialization and of the possible application of methods of mass production to most areas of manufacture lead to the gradual extension of design . to protect the original ornamental and non-functional features of an industrial article or product that result from design activity. by rewarding the creator for the effort which has produced the industrial design. and the need for the item to perform its intended function efficiently. along with. the first law giving protection to industrial designs was the Designing and Printing of Linens. industrial designs. copyright. which enable a real person as such to be protected against the unauthorized commercial or advertising use of the essential features of his or her personality (name. image. which gave protection for a period of two months to “every person who shall invent. In these latter situations. unfair competition). in a lay or general sense. pursuant to a registration system. In a legal sense. refers to the creative activity of achieving a formal or ornamental appearance for mass-produced items that. and become the Proprietor of any new and original pattern or patterns for printing Linens. particularly in areas where a range of products performing the same function is available in the market. pseudonym or nickname.) or a real recognizable person portraying a character against the unauthorized commercial or advertising use of the essential features of the character portrayed.639 Industrial design. Industrial Designs and Integrated Circuits Industrial Designs Introduction to Industrial Designs 2. or cause to be invented. The legal protection of industrial designs thus serves the important function of protecting one of the distinctive elements by which manufacturers achieve market success. satisfies both the need for the item to appeal visually to potential consumers. In the United Kingdom. Those rights will. Calicoes or Muslins. either under general law (Constitution. if the technical performance of the various products offered by different manufacturers is relatively equal. etc. Cotton.” The contribution and importance of design in the growing textile industries was thereby recognized. designed and printed.638 Many countries have enacted provisions. Calicoes and Muslins Act of 1787. In so doing. the emergence of protection for industrial designs is intimately connected with the growth of industrialization and methods of mass production. legal protection serves as an incentive to the investment of resources in fostering the design element of production. privacy rights and personality or publicity rights. aesthetic appeal.112 WIPO Intellectual Property Handbook: Policy. symbols. Cottons. cost. within the available cost constraints. design and print.641 Historically. Law and Use Other Forms of Protection 2. 2. etc.) or under specific statutes. industrial design refers to the right granted in many countries. Such protection may be achieved through the notions of defamation or libel. 2. Civil Code. in general. Evolution of Design Protection 2.640 Visual appeal is one of the considerations that influence the decision of consumers to prefer one product over another.

or for any two or more of such purposes and by whatever means such design may be so applicable. or by painting. or by sewing. established a special council (Conciliation Board or Conseil de Prud’hommes) in Lyon responsible for receiving deposits of designs and for regulating disputes between manufacturers concerning designs. The Law of March 18. in particular. On the other hand.Fields of Intellectual Property Protection 113 protection to other fields of endeavor (notably sculpted figures used in the pottery and porcelain industries) up until the consolidation achieved in the Designs Act of 1842. and that whether such design be so applicable for the pattern. Design protection does not apply to articles or products in such a way as to grant the . the entitlement to such rights. particularly those manufacturing silk. or for the shape or configuration.and three-dimensional designs in all areas of industrial activity. there is the need to provide efficient and effective protection.” Design was thereby recognized as a fundamental element of all production and manufacture. soon led to the enactment in 1806 of a special law dealing with industrial designs. The Legal Protection of Industrial Designs 2. through judicial interpretation.643 A somewhat similar evolution of design protection took place in France. the duration of such rights. but rather the design which is applied to or embodied in such articles or products. or partly artificial and partly natural. 2.646 The emphasis is on an abstract conception or idea as the subject matter of design protection. On the one hand. requires the establishment of a balance of interests.Chapter 2 . or for the ornament thereof. mechanical. separate or combined. or of any substance. The establishment of this balance requires careful consideration of a number of matters. whether by printing. there is the need to ensure that the law does not unnecessarily extend protection beyond what is necessary to create the required incentive for design activity. or by weaving. the system of deposit and regulation by special council was extended to other cities and. While initially destined for industries in Lyon. or by casting. The Law on Literary and Artistic Property of 1793 was applied in certain cases to the protection of designs. Definition of Subject Matter of Protection Design as Conception or Idea 2. The growth of the textile industries. of which the most important are: the definition of the subject matter of protection. the method of acquisition of such rights. or by staining. to two. 1806. or by embroidery. or by engraving.644 The formulation of a legal system for the protection of industrial designs. which extended protection to “any new and original design whether such design be applicable to the ornamenting of any article of manufacture. the rights which apply to the proprietor of the subject matter. in order that the law may fulfill its function of promoting the design element in production. 2. or by modeling. manual. artificial or natural.645 The subject matter of the legal protection of industrial designs is not articles or products. so that the least number of impediments are introduced to the free use of available designs. or by any other means whatsoever. or by embossing. or chemical. like the provision of legal protection for all forms of intellectual property.

Law and Use proprietor of the design exclusive rights over the commercial exploitation of those articles or products. one of the basic purposes of industrial design protection is the stimulation of the design element of production.647 The conception or idea that constitutes the design may be something which can be expressed either two-dimensionally or three-dimensionally. the words “shape” and “configuration” are synonymous. also provides for a “design right. that designs which are dictated solely by the function which the article is to perform shall be excluded from protection. accordingly. The requirement is variously expressed in different laws. provided that such substitute articles do not embody or reproduce the protected design. Rather.114 WIPO Intellectual Property Handbook: Policy. the Design Law of Japan similarly extends protection to designs “capable of being used in industrial manufacture” (Article 3(1)). . 2. l959. for example. configuration. and that both signify the form in which an article is made or. and that both refer to something embossed.650 While the subject matter of design protection is an essentially abstract conception.1 of the TRIPS Agreement provides. something three-dimensional. and laws of France and Italy refer to both drawings or sketches (dessins—two-dimensional) and models (modèles—three-dimensional). commonly found in industrial design laws. is to be found in the laws of other countries. Protection does not. Thus. pattern or ornament” (Section 1). It has been generally considered that. The definition of “design” which is used in the Registered Designs Act 1949 of the United Kingdom.648 The Copyright. as amended) refers to “design” as meaning “the shape. it has also been considered that the words “pattern” and “ornament” are synonymous. therefore. Many articles to which designs are applied are not themselves novel. or in respect of articles produced on a large scale. the Design Law of Japan (Law No. Article 25. For example. Exclusion of Designs Dictated by Function 2.653 A fundamental purpose is served by the exclusion from protection of designs dictated solely by the function which the article is to perform.652 The concern of industrial design protection with appearance only is also apparent from the requirement.” Design is defined as referring to “any aspect of the shape or configuration (whether internal or external) of the whole or part of an article” (Section 213(2)). to something essentially two-dimensional. Likewise. It is. 2. Application to or Embodiment in an Article 2. Designs and Patents Act 1988. for instance. Belts. that Members of the WTO may provide that industrial design protection shall not extend to designs dictated essentially by technical or functional considerations. 2.649 A similar approach. 2. emphasizing the inclusion of both two-dimensional and three-dimensional designs. in this definition. a usual feature of industrial design laws that a design can be protected only if the design is capable of being used in industry. shoes. since the latter is purely concerned with aesthetic creations. engraved or placed upon an article for the purpose of its decoration or. pattern or color or a combination of these in an article”. In this respect. prevent other manufacturers from producing or dealing in similar articles fulfilling the same utilitarian function. of the United Kingdom. 125 of April 13. design protection only applies to such articles or products as embody or reproduce the protected design. and are produced by a large number of different manufacturers. in other words. 2. refers to “features of shape. in other words.651 The requirement that a design must be applied to utilitarian articles in order to be protected is one of the principal matters which distinguishes the objectives of industrial design protection from copyright protection.

Such a fear is in practice. only if the given function could not be achieved after a design is altered would the design be excluded from protection. or may relate to territory. since the exclusion relates only to those designs which are indispensable for achieving the desired function. or may relate to means of expression. meaning that novelty is assessed by reference to written or tangible disclosures anywhere in the world and to oral disclosures only within the relevant jurisdiction. Rights in Industrial Designs 2. the qualification may relate to time. may be produced by hundreds of different manufacturers.655 It is a requirement of all industrial design laws that protection through registration shall be granted only to designs which are novel or. as opposed to anywhere in the world. The novelty of the design constitutes the fundamental reason for the grant of a reward to the originator through protection by registration of the industrial design. meaning that novelty is judged by reference to all designs published within the relevant jurisdiction. 2. Novelty or Originality 2. under certain theories of design. In this latter situation.Fields of Intellectual Property Protection 115 screws and piston rings. the nature of the novelty that is required as a condition of protection differs amongst the laws of various countries. meaning that the design for which registration is sought must be new as against all other designs produced in all other parts of the world at any previous time and disclosed by any tangible or oral means. The question is thus whether the design for which protection is sought constitutes the sole solution for an intended function. On the other hand. as it is sometimes expressed. The broad policy argument in favor of a qualified standard of novelty is that one purpose of design registration is to encourage new design within the relevant jurisdiction.654 Since. it is often said that the exclusion from protection of designs which are dictated purely by function may have the effect of excluding too broad a range of designs from protection. Such an exclusion is not warranted. for example.656 While the requirement of novelty is to be found in all laws. and all articles within each class are intended to perform the same function. 2.658 The rights which are accorded to the proprietor of a validly registered industrial design again emphasize the essential purpose of design law in promoting and protecting the design . unless the design is sufficiently novel and inventive to qualify under the rigorous standards for patent protection. many ways of achieving a given function will be possible. meaning that novelty is judged by reference to designs published within a limited preceding period of time. Thus. and which therefore justifies the reward of exclusive rights. however. screws. protection for that design would have the effect of excluding all other manufacturers from producing items intended to perform the same function. form should follow function. however. It should be noted.Chapter 2 . If a design for one such article. is dictated purely by the function which the screw is intended to perform. that it would not necessarily follow from a qualified standard of novelty that a person could obtain valid rights within the jurisdiction simply by registering a design which he had seen overseas and copied. original. so that a novel design registered within that jurisdiction should not be deprived of protection by the publication elsewhere of a design which its originator did not introduce into the jurisdiction to add to the designs available to industry. unwarranted. In reality.657 The broad policy argument in favor of a standard of unqualified universal novelty is that exclusive rights by registration should be granted only where the originator of the design has produced something which is truly novel. a qualified standard of novelty is sometimes required. for example. since it is often also a requirement of design law that the applicant be the author of the design. 2. The novelty required is sometimes absolute or universal.

660 First. whereas copyright accords to an author the right to prevent the copying of a work. whether the requisite number of representations or specimens of the design are filed with the application). One approach to this question is to treat the computer like any other tool which may be used by a designer to assist in the process of generating a design. the thing for which the contractor is being paid is the production of the design for the use of the person commissioning the design. The basis for this rule is that the creation of the design falls within the duties which the employee is paid to perform.661 Much contemporary design is produced with the assistance of computers. but no search is made of the prior art to determine whether the substantive criterion of novelty or originality is satisfied by the design for which registration is sought. Entitlement to Rights 2. Two questions concerning the operation of this principle arise and are often the subject of particular legislative provisions. Law and Use element of industrial production. 2. in the case of the contractor.” Acquisition of Rights Registration 2. Likewise. or who may have used. According to this system. In these situations. or to the person who has commissioned the design. the design or a substantially similar design. 2. or of bringing proceedings for the cancellation of a registration which it is alleged is invalid. industrial design law accords to the proprietor the exclusive right to prevent the unauthorized exploitation of the design in industrial articles. 2. Thus. or by a contractor pursuant to a commission. The most commonly adopted examination system provides for a formal examination only of an application for a registered design. Any person interested in using such a design will have the opportunity either to oppose the registration of the design for which application has been made. so that the employee should seek the reward for his creative activity in an appropriate level of remuneration. the person who is responsible for manipulating the computer’s capacity to produce a design would be considered to be the author of the design. the law usually provides that the entitlement to legal protection of the design shall belong the employer. On this basis. responsibility and other conditions of employment.116 WIPO Intellectual Property Handbook: Policy.659 The right to legal protection in respect of an industrial design belongs to the creator (or author or originator) of the industrial design. if the relevant law provides for an opposition procedure.663 A system requiring only formal examination has the effect of shifting the burden of assessing novelty to those interested persons in the market who may wish to use. The system thus offers a means of reducing the administrative burden of the maintenance of a system of registration of industrial .662 Industrial design protection is usually granted pursuant to a procedure for the registration of such designs. of the United Kingdom which provides: “In the case of a computer-generated design the person by whom the arrangements necessary for the creation of the design are undertaken shall be taken to be the designer. A provision to this effect is to be found in Section 214(2) of the Copyright. Designs and Patents Act 1988. The question arises whether it can be said that there is an author or creator who is entitled to legal protection in respect of designs generated with the assistance of a computer. there is the question of the entitlement to legal protection in respect of an industrial design that has been created by an employee. an application is examined to ensure that it meets with each of the formal requirements for an application which are imposed by the relevant law (for example.

where the subject matter of the right is the work which is created by the author and which is thus defined by the author. 2. the subject matter of the rights of the proprietor of an industrial design are defined by the design which has been registered. Designs and Patents Act 1988.665 Rights in designs may.Fields of Intellectual Property Protection 117 designs. It necessitates the maintenance of a search file and sufficient skilled manpower to undertake the substantive examination. and the “design law” under the Copyright. under certain laws.668 As opposed to copyright. The relatively short period of protection may be related to the association of designs with more general styles of fashions. particularly in highly fashion-conscious areas. Duration of Rights 2. often divided into terms requiring the proprietor to renew the registration in order to obtain an extension of the term. of the United Kingdom. since. also be acquired by the act of creation and fixation of the design. it is on the other hand often included in order to facilitate the enforcement of a proprietor’s rights. While this right is sometimes considered as excessive in that it deals only with preparatory acts. in a document or by embodying the design in an article. These systems do not require any formal registration procedure for the acquisition of exclusive rights in the design. However. 2. 2. Such a search file can very often be almost impossible to maintain. such as clothing or footwear. Examples of this system are provided by the Law of France.669 The term for an industrial design right varies from country to country. It also offers a solution to the problem of maintaining an adequate search file to undertake a substantive examination of the novelty of designs. sell. . the exclusive rights of the proprietor also extend to preventing another from stocking any articles to which the design has been applied or in which it is embodied.667 In some laws.666 The right to prevent others from exploiting an industrial design usually encompasses the exclusive right to do any of the following things for industrial or commercial purposes: make articles to which the design is applied or in which the design is embodied. it is usual to provide that the proprietor’s rights extend not only to the unauthorized exploitation of the exact design which has been registered. import articles to which the design is applied or in which it is embodied. Creation and Fixation 2. but also to the unauthorized exploitation of any imitations of such a design which differ from the registered design only in immaterial respects. it would need to include all designs made at any time in any part of the world since the commencement of recorded history. on the basis of a condition of unqualified universal novelty. since it may often be easier to locate a stock of infringing articles than to apprehend a person in the act of selling or offering for sale such articles. The usual maximum term goes from 10 to 25 years.Chapter 2 .664 The alternative system of examination provides for a search of past designs and an examination of the design for which registration is sought to ascertain whether it satisfies the required condition of novelty. which tend to enjoy somewhat transient acceptance or success. hire or offer for sale any such articles. Nature of the Rights 2.

the copyright law or the industrial design law.675 Another field in the protection of intellectual property is that of layout-designs (topographies) of integrated circuits. Finally. there is infringement only in the reproduction of the work in which copyright subsists.672 The system of cumulation of protection by the industrial design law and the copyright law exists in France and in Germany. and financially. protection is cumulative. There is infringement even though the infringer acted independently and without knowledge of the registered design. ten or fifteen years. industrial designs law has relations both with copyright law and with industrial property law. and the smaller the space . 2. or at least in the country where protection is claimed. 2.” Co-existence of protection means that the creator may choose to be protected either by the industrial design law or by the copyright law. which is available without compliance with any formality.671 But it is to be noted that cumulation must be distinguished from “co-existence. the creator may still have the protection of the copyright law. And the system of co-existence of protection by both laws prevails in most other countries. 2.674 The right conferred by registration of an industrial design is an absolute right in the sense that there is infringement whether or not there has been deliberate copying. Supposing a particular design embodies elements or features which are protected both by the copyright law and the industrial design law. If he has registered the industrial design. at the expiration of such registration he can no longer claim protection under the copyright law. Industrial design protection endures generally for a short period of three. as he chooses.118 WIPO Intellectual Property Handbook: Policy. at least for the particular application of the industrial design. Law and Use Relation to Copyright 2. 2. Copyright endures in most countries for the life of the author and fifty years after his death. he can claim the protection of copyright law. Cumulation of protection means that the design is protected simultaneously and concurrently by both laws in the sense that the creator can invoke the protection of either or both. it means that after the term of protection of the registered design expires. The smaller an integrated circuit. Copyright in most countries subsists without formalities. protection is lost unless the industrial design is registered by the applicant before publication or public use anywhere. If he has chosen the one. Under the industrial design law. may a creator of an industrial design claim cumulatively or simultaneously the protection of both laws? If this question is answered affirmatively.670 Objects qualifying for protection under the law of industrial designs might equally well receive protection from the law of copyright. Registration is not necessary. he can no longer invoke the other. the less the material needed for its manufacture. Thus. Integrated Circuits 2. They are usually the result of an enormous investment. both in terms of the time of highly qualified experts. There is a continuing need for the creation of new layout-designs which reduce the dimensions of existing integrated circuits and simultaneously increase their functions. 2.673 The difference between protection by the copyright law and protection by the industrial design law is as follows. Under copyright law. five. It also means that if he has failed to obtain the protection of the industrial design law by failing to register his design.676 The layout-designs of integrated circuits are creations of the human mind.

2. at least one of which is an active element. 2...680 Article 2 of the IPIC Treaty gives the following definitions: “(i) ‘integrated circuit’ means a product. and of some or all of the interconnections of an integrated circuit. as a minimum. in which the elements. which adopted a Treaty on Intellectual Property in Respect of Integrated Circuits (IPIC Treaty).Chapter 2 .682 The Contracting Parties must. and some or all of the inter-connections are integrally formed in and/or on a piece of material and which is intended to perform an electronic function. certain acts engaged in unknowingly will not constitute infringement.C. or such a three-dimensional disposition prepared for an integrated circuit intended for manufacture . such as watches. of the elements. in its final form or an intermediate form. consider the following acts to be unlawful if performed without the authorization of the holder of the right: the reproduction of the lay-out design. ” Nature of the System Established by the Washington Treaty 2. including articles of everyday use.681 Under the IPIC Treaty. Such obligation applies to layoutdesigns that are original in the sense that they are the result of their creators’ own intellectual effort and are not commonplace among creators of layout designs and manufacturers of integrated circuits at the time of their creation. 2.. and the importation.679 The Treaty has been incorporated by reference into the TRIPS Agreement of the World Trade Organization (WTO). television sets. etc. whether or not the integrated circuit concerned is incorporated in an article..677 Whereas the creation of a new layout-design for an integrated circuit involves an important investment. in 1989. (ii) ‘layout-design (topography)’ means the three-dimensional disposition. the circumstances in which layoutdesigns may be used without the consent of right-holders are more restricted. 2. D. .678 A Diplomatic Conference was held at Washington. however expressed. Copying may be done by photographing each layer of an integrated circuit and preparing masks for its production on the basis of the photographs obtained. automobiles. Integrated circuits are utilized in a large range of products. at least one of which is an active element. as well as sophisticated data processing equipment. the copying of such a layout-design may cost only a fraction of that investment. each Contracting Party is obliged to secure. the exclusive right of the right-holder extends also to articles incorporating integrated circuits in which a protected layout-design is incorporated. in so far as it continues to contain an unlawfully reproduced layout-design. intellectual property protection of layout-designs (topographies) of integrated circuits. sale or other distribution for commercial purposes of the layout-design or an integrated circuit in which the layout-design is incorporated. The Treaty is open to States Members of WIPO or the United Nations and to intergovernmental organizations meeting certain criteria. but Members may provide a term of protection of 15 years from the creation of the layout-design. subject to the following modifications: the term of protection is at least 10 (rather than eight) years from the date of filing an application or of the first commercial exploitation in the world. washing machines.Fields of Intellectual Property Protection 119 needed to accommodate it. Definition of Subject Matter of Protection 2. The possibility of such copying is the main reason for the introduction of legislation for the protection of layout-designs. throughout its territory.

” “Havana. Law and Use 2. This is maybe best demonstrated by the term “geographical indication” itself. towns. 2.684 Mention should be made.” In the context of the integrated circuits industry. It is considered desirable to permit reverse engineering even if it involves the copying of an existing layout-design. whereas “appellation of origin” means the geographical name of a country.” “Darjeeling”—are some well-known examples for names which are associated throughout the world with products of a certain nature and quality. According to this terminology. region or specific place which serves to designate a product originating therein the characteristic qualities of which are due exclusively or essentially to the geographical environment.” “Porto. 2. or on their registration. in this connection. certain acts may be freely performed for private purposes or for the sole purpose of evaluation. their function of designating existing places. the following distinction is made between indications of source and appellations of origin: “indication of source” means any expression or sign used to indicate that a product or service originates in a country.689 The Paris Convention for the Protection of Industrial Property does not contain the notion of geographical indication.” “Roquefort.688 With the exception of design law. research or teaching. One common feature of all those names is their geographical connotation. climate. regions or countries. they are often exposed to misappropriation. 2. counterfeiting or forgery. Article 1 paragraph (2) defines as subjects of industrial property.120 WIPO Intellectual Property Handbook: Policy. This qualitative link consists of certain characteristics of the product which are exclusively or essentially attributable to its geographical origin such as. that is to say. of the concept of “reverse engineering.686 “Champagne. when we hear these names we think of products rather than the places they designate. including natural or human factors or both natural and human factors. and their protection—national as well as international—is highly desirable. soil or . 2. Geographical Indications Introduction 2. The use of an appellation of origin requires a quality link between the product and its area of production.” “Pilsen.” “Tequila. For this very reason. which is relatively new and appeared only recently in international negotiations.” “Chianti. indications of source and appellations of origin.685 The Contracting Parties may make protection of layout-designs dependent on their commercial exploitation or on the filing of an application for their registration. for example. a region or a specific place. there is probably no category of intellectual property law where there exists such a variety of concepts of protection as in the field of geographical indications. 2. reverse engineering is the use of an existing layoutdesign in order to improve upon it. provided that an improved layout-design is thereby created—an advance of technology which is in the general public interest. This is the terminology traditionally applied and still officially used in the conventions and agreements administered by WIPO.690 It is important to highlight the difference between indications of source and appellations of origin. analysis. 2.” “Cognac.683 However. However. inter alia.687 Those examples show that geographical indications can acquire a high reputation and thus may be valuable commercial assets.” “Sheffield.

an approach that closely resembles the appellation of origin kind of protection. on the Protection of Geographical Indications and Designations of Origin for Agricultural Products and Foodstuffs and in the Agreement on TRIPS. such as the name of a town. Thus. The question whether a geographical indication is a generic term and void of any protection is. there is no “owner” of a geographical indication in the sense that one person or enterprise can exclude other persons or enterprises from the use of a geographical indication. the term “indication of source” comprises all appellations of origin. the use of an indication of source on a given product is merely subject to the condition that this product originates from the place designated by the indication of source. it is important to distinguish them from trademarks: whereas a trademark identifies the enterprise which offers certain products or services on the market.691 The term “geographical indication” has been chosen by WIPO to describe the subject matter of a new treaty for the international protection of names and symbols which indicate a certain geographical origin of a given product. the term is intended to be used in its widest possible meaning. Examples for such indirect geographical indications are the Eiffel Tower for Paris. to be determined by national law. the term “geographical indication” is also used in the EC Council Regulation No. either for products which do not originate from the geographical place indicated. whereas it is considered to be a generic or semi-generic term in another country. 2081/92 of July 14. 2. It might well be that a geographical name is regarded in one country as a geographical indication and is protected accordingly.Fields of Intellectual Property Protection 121 traditional methods of production. a geographical indication identifies a geographical area in which one or several enterprises are located which produce the kind of product for which the geographical indication is used. On the other hand. However. 2. a region or a country (“direct geographical indications”). because geographical indications are not only constituted by names. will lose their protection. It embraces all existing means of protection of such names and symbols. but possibly subject to compliance with certain quality requirements such as prescribed. in administrative decrees governing the use of appellations of origin. or not complying with the prescribed quality standards. but. regardless of whether they indicate that the qualities of a given product are due to its geographical origin (such as appellations of origin). Notorious examples for such diverging treatment of geographical names are the French names “Champagne” and “Chablis” . consequently. In other words. 2. In this connection. This definition also covers symbols. Such symbols may be capable of indicating the origin of goods without literally naming its place of origin. Appellations of origin can be understood as a special kind of indication of source. or they merely indicate the place of origin of a product (such as indications of source). in trying to take into account all existing forms of protection of geographical indications. but may also consist of symbols. this presentation. for example. “mere” indications of source are not covered by the specific notion of geographical indication used in those two legal texts.693 When considering geographical indications as a special kind of distinctive sign used in commerce and thus as a particular category of intellectual property. this term is applied to products whose quality and characteristics are attributable to their geographical origin.694 What is meant by “protection” of geographical indications? First of all. uses the term in its widest meaning. The second aspect related to the issue of protection is the question of protecting geographical indications against becoming generic expressions: in that case they have lost all their distinctiveness and. 2. but each and every enterprise which is located in the area to which the geographical indication refers has the right to use the said indication for the products originating in the said area. protection means the right to prevent unauthorized persons from using geographical indications. in its general use. 1992. it has become rather a designation for those indications of source which are not considered to be appellations of origin. In both texts.Chapter 2 . in the absence of an international agreement.692 On the other hand. According to the terminology traditionally applied. the Matterhorn for Switzerland or the Tower Bridge for London.

This aspect of protection is especially important in the context of international protection of geographical indications and is dealt with. the same or a similar system was introduced also in other countries. With regard to the latter approach. According to this law. Registration of Collective Marks or Certification Marks 2. the need for the protection and the encouragement of local. region or locality that serves to designate a product originating therein. 2. Protection of Geographical Indications on the National Level 2. namely appellations of origin. . for example. an appellation of origin consists of the name of a country. 1919.697 The French Law of May 6.698 Because of the success of the French appellations of origin. as under the new Russian law. but which result from the direct application of legislative provisions or principles established by jurisprudence. mainly in the sector of wines and spirits. mainly cheese and butter). in particular. three main categories can be distinguished. In addition. including both natural and human factors. The second category covers the protection of geographical indications through registration of collective marks (including agricultural labels) or certification marks (or guarantee marks). the quality and characteristics of which are due to the geographical environment. In order to ensure that the products possess the specified qualities.122 WIPO Intellectual Property Handbook: Policy. poultry and plant products. Special Titles of Protection 2. or from the adoption of decrees. and quality controls are carried out regularly. whereas. recognized the existence of appellations of origin and laid down conditions for their protection. they are regarded as being semi-generic names. This means that only such products are protected under this special title which originate from a specific area and which owe their specific quality to their place of origin. Only products which comply with the quality standards are protected by an appellation of origin. in France. as is the practice in France since the adoption.699 The protection of a given geographical indication may not only be based on a public or administrative act. of a special law for the protection of appellations of origin. The third category includes all special titles of protection of geographical indications which result from a decision made by the competent government authority establishing the protection. comprises the protection of appellations of origin—whether they result from a registration with the industrial property office.696 Already early in this century it was felt that the protection of indications of source against false or deceptive use was insufficient. and therefore may be also used for wines not originating from the French area of production. Law and Use which. The first category comprises all possibilities of protection which are not based on a decision taken by the competent authority establishing protection with respect to a particular geographical indication. Initially.695 As regards the various forms of protection of geographical indications on the national level. but may also result from a private initiative. 2. It was in France where the first statute was enacted which provided for the protection of geographical indications through a special title of industrial property. by the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration. are only allowed to be used for products originating from a certain geographical area and produced according to certain quality standards. in 1919. a control mechanism has been set up by the competent authorities. traditional methods of production emerged. in the United States of America for example. appellations of origin only concerned wines and spirits. but later the concept was extended to include other products (such as dairy products. This category.

2. in case of conflict with a senior right. Such a body can be an association or cooperative of manufacturers. the origin of goods or services. the association that owns it has the right to prohibit its use by persons who are not members of the association. The collective mark is owned by the association which exclusively grants its members the right to use it. the registration of a geographical indication as collective mark may not. The question whether a geographical indication is registrable as a collective mark depends entirely on a given national law. A certification mark may be used to certify. that exclusion has been abolished by some countries. However. An agricultural label can be a national label (known as “red label”) or a regional label. certification marks and guarantee marks are not owned by a collective body such as an association of producers. Some national trademark laws exclude the registration of geographical indications as collective marks. but by a certification authority. The association may be a domestic one or a foreign one.700 A collective mark is a mark the use of which is only allowed to the members of a collective body. An agricultural label is a collective mark that certifies that a foodstuff or a non-nutritious and non-transformed agricultural product (such as cereal seeds) possesses a combination of specific characteristics and a level of quality which is higher than that of similar products. traditional or representative of a region. the same principles as for the registration of collective marks apply. In general. The institution which owns the registered certification mark or guarantee mark has the right to prohibit the use of that mark by persons whose products do not comply with the requirements set out in the regulations.702 In contrast to collective marks. Such authority may be a local council or an association which is not engaged in the production or the trade of the products concerned.704 A special form of protected geographical indication resembling the concept of collective marks is the French “agricultural label” (in French “label agricole”).701 Once a geographical indication has been registered as a collective mark. in some countries.Fields of Intellectual Property Protection 123 collective marks or certification marks provide a means for the protection of geographical indications independent of statutory or judicial measures. guarantee mark) differ from country to country. The application for the registration of a certification mark has to be accompanied by regulations which govern the use of the certification mark. Depending on the applicable national law. inter alia. and therefore may to some extent be suitable for the protection of a geographical indication. producers or traders. the protection of a geographical indication through registration as certification mark or guarantee mark is equivalent to that conferred by registration as a collective mark. Moreover. Normally. The latter is of particular importance because it is the owner of the certification mark who must ensure that the goods bearing the certification mark possess the certified qualities.703 Where a geographical indication has been registered as a certification mark or guarantee mark. although.Chapter 2 . it may normally be used by everybody whose products comply with the requirements set out in the regulation. per se. may not exist in case of conflict with a senior right. the use of the collective mark is governed by regulations which have to be submitted to the industrial property office together with the application for registration. 2. the laws of some countries contain strict use requirements which may result in the cancellation of the registration of the collective mark in case it is not continuously used. 2. The concepts of collective mark and certification mark (or. Such right to use. 2. 2. more recently. the members of the association may be excluded from using the collective mark. however. prevent the mark from becoming a generic term. Products in respect of which an appellation of origin has . inter alia. Furthermore. Regarding the registrability of geographical indications as certification marks and guarantee marks. the latter referring to characteristics which are specific. a collective mark or certification mark may serve to indicate. the origin of products or services.

The Law of Unfair Competition 2.124 WIPO Intellectual Property Handbook: Policy. and the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration (hereinafter referred to as the Lisbon Agreement). or on common law—can be instituted in order to prevent competitors from resorting. Protection of Geographical Indications on the International Level through Multilateral Treaties 2.708 Three multilateral treaties administered by WIPO contain provisions for the protection of geographical indications: the Paris Convention for the Protection of Industrial Property. the Madrid Agreement for the Repression of False or Deceptive Indications of Source on Goods (hereinafter referred to as the Madrid Agreement). In other words. Therefore. An example of a foreign product is the label for “Scottish salmon”. Furthermore. Furthermore. Law and Use been established and some categories of wines (even if not benefitting from an appellation of origin) may not be the subject of protection by way of an agricultural label. Under some national laws. The application of the Decree is not limited to French products. such use may constitute a misappropriation of the goodwill of the person who is truly entitled to use the geographical indication. The agricultural label is registered in the name of the entity that controls its use. but so far only little use has been made of the possibility of applying the Decree to foreign products. a geographical indication. in the course of trade. may not be protectable against misleading use by competitors through an action for unfair competition. so that consumers are deceived as to the true place of origin of the products or services. to such misleading practices. proof of damages or the likelihood of damages caused by such misleading practices is required. the outcome of such an action is uncertain. the extent to which the geographical indication in question must have acquired a reputation may vary from country to country. In particular. . 2. Geographical indications which become generic terms in a particular country lose their distinctive character and are no longer protectable in that country. An action for unfair competition—which. a geographical indication which has not been used for a certain time may lose its reputation and therefore may no longer be protectable by an action for unfair competition. the reputation of which is not yet established on the market. a given geographical indication must have acquired a certain reputation or goodwill. It may be required that the geographical indication must have been used in the course of trade for a certain time and that an association between the geographical indication and the place of origin of the products and services must have been created amongst the relevant circles. the following basic principles appear to be generally recognized. In order to be protectable. depending on the national law. Such an action further requires that the use of the geographical indication on goods or services not originating from the respective geographical area is misleading.706 Although the conditions for a successful action for unfair competition vary from country to country. the potential buyers of the product must associate the geographical indication with the place of origin of the goods or services.705 The use of a certain geographical indication for goods or services not originating from the respective area may be misleading and thus may deceive consumers. is either based on statutory provisions.707 Whereas the principle that misleading use of a geographical indication may give rise to an action for unfair competition is generally recognized. 2. as interpreted by court decisions.

under certain conditions.” 2.” The obligation to protect indications of source is specifically provided for in Article 10. producers or traders to take action. 2. among others. or in the country where the false indication of source is used. where certain geographical areas in different countries have the same name but only one of those areas is internationally known for particular products. false or misleading geographical indications.710 Article 1(2) provides that the protection of industrial property has as its object. since any direct or indirect use.709 Several provisions of the Paris Convention deal specifically with indications of source or appellations of origin: Article 1(2) contains a reference to “indications of source” and “appellations of origin” in the list of objects of industrial property.Chapter 2 . 2. engaged in the production or manufacture of or trade in such goods and established either in the locality falsely indicated as the source. or at least the public of a certain country: for example. 2. may mislead the public. is sanctionable. and Article 10ter reinforces the provisions of Articles 9 and 10. if those sanctions do not exist in a particular country. in cases of direct or indirect use of false indications of source. 10 and 10ter are applicable to appellations of origin since each appellation of origin by definition constitutes an indication of source. Article 9 establishes the principle that seizure upon importation must be provided for.Fields of Intellectual Property Protection 125 The Paris Convention for the Protection of Industrial Property 2. or at least prohibition of importation or seizure inside the country but. any interested party. or merchant. on the other. Nevertheless. 2. shall in any case be deemed an interested party. “indications of source” or “appellations of origin. It provides that the sanctions prescribed by Article 9 in respect of goods unlawfully bearing a trademark or trade name apply to any use of a “false indication of the source” of a product. the actions and remedies available in such cases are to be applied. sets a general definition of what constitutes an act of unfair competition and contains a non-exhaustive list of three types of acts which. there is no need for the false indication to appear on the product. Article 10(2) defines what is meant by “interested party”. For the provision to be applicable. or in the country falsely indicated. federations and associations representing interested industrialists. but there are no special provisions in the Paris Convention for the protection of appellations of origin. inter alia. in particular.715 Article 10ter is also relevant inasmuch as it obliges countries of the Union to provide. stipulating that “any producer. any other competent authority. manufacturer. without being false. for example in advertising. Article 10 deals with the protection of indications of source. Articles 9. whether a natural person or a legal entity. the use of that name in connection with products originating from another area may be misleading.714 Article 10bis concerns the protection against unfair competition and as such provides a basis for protection against the use of confusing. Article 10bis obliges countries of the Paris Union to assure effective protection against unfair competition. but not sanctionable. must be prohibited. on the one hand. appropriate legal remedies and to permit. with a view to the repression of false indications of source. This means that no indications of source may be used that refer to a geographical area from which the products in question do not originate.712 As regards the sanctions in the case of the use of a false indication of source. 2. .711 Article 10(1) is the basic provision of the Paris Convention on indications of source. Article 9 provides for certain sanctions which are applicable.713 Article 9(3) and Article 10(2) determine who may request seizure on importation or the imposition of other sanctions: the public prosecutor. Article 10(1) does not apply to indications which. However. or in the region where such locality is situated.

although specifically mentioned in the Paris Convention. for which protection is absolute. must be seized on importation into any of the States party to the Madrid Agreement.126 WIPO Intellectual Property Handbook: Policy.720 Article 3 authorizes a vendor to indicate his name or address on goods coming from a country other than that in which the sale takes place. sanctions.716 The main advantage of the protection afforded by the Paris Convention to indications of source lies in the extent of the territorial area covered by the member countries of the Paris Union. are generic names of a product in other countries is not dealt with in the Paris Convention. the question of indications which. in spite of the important exception constituted by the case of regional appellations concerning the source of products of the vine.719 The other paragraphs of Articles 1 and 2 specify the cases and the manner in which seizure or similar measures may be requested and carried out. do not fall within the provisions of the Madrid Agreement. Only regional appellations concerning the source of products of the vine are excluded from the reservation inherent in the provision. Law and Use 2. .724 The limited geographical scope of the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration is due to particular characteristics of the substantive provisions of the Agreement. 2.718 Article 1(1) of the Madrid Agreement provides that any product bearing a false or deceptive indication by which one of the States party to the Madrid Agreement or a place situated therein is directly or indirectly indicated as being the country or place of origin. 2. 2. in countries other than the country of origin. 2. or by some other indication sufficient to avoid any error as to the true source of the wares. There is no express provision to the effect that private individuals may request seizure directly.717 The Madrid Agreement for the Repression of False or Deceptive Indications of Source on Goods is a special agreement within the framework of the Paris Union. of all indications capable of deceiving the public as to the source of the goods. 2. The Agreement aims at the repression not only of false. 2.723 A list of States that are party to the Madrid Agreement for the Repression of False or Deceptive Indications of Source on Goods can be found in the appropriate document inserted in the back flap of this publication.722 Article 4 provides that the courts of each country have to decide what appellations. to have his name or address accompanied by an exact indication in clear characters of the country or place of manufacture or production. member States are free to provide that such persons have to apply through the public prosecutor or any other competent authority. Finally. The Lisbon Agreement for the Protection of Appellations of Origin and their International Registration 2. in connection with the sale or display or offering for sale of any goods. Thus. indications of source. information on the number of member countries can be found in the appropriate document inserted in the back flap of this publication. but obliges him. if he does so.721 Article 3bis obliges the States party to the Madrid Agreement to prohibit the use. are not in all cases mandatory and apply only to false but not to misleading indications of source. on account of their generic character. On the other hand. but also of deceptive. The reservation substantially limits the scope of the Madrid Agreement. The Madrid Agreement for the Repression of False and Deceptive Indications of Source on Goods 2. so that member States of the Paris Union can be entirely free in that respect.

730 Article 2(2) defines the country of origin as being “the country whose name. Each appellation still has to benefit from distinct and express protection. Simple indications of source (which can be used for products whose characteristics do not result from the geographical environment) are excluded from its purview. the definition of appellation of origin in Article 2(1) has a serious drawback for countries whose denominations typically do not apply to agricultural products or products of handicraft but to products of industry. in particular in view of the increasing mobility of human resources in all parts of the world. deriving from a specific official act (a legislative or administrative provision. or a registration).729 The second condition laid down by Article 1(2) is that the appellation of origin must be registered with the International Bureau of WIPO. Those elements must be indicated in the application for international registration in accordance with Rule 1 of the Regulations under the Lisbon Agreement. that is. in accordance with the terms of the Agreement.Fields of Intellectual Property Protection 127 2. The difficulty arises from the fact that Article 2(1) requires the existence of a qualitative link between the geographical environment and the product. as for the geographical environment.728 Article 1(2) provides that the countries party to the Lisbon Agreement undertake to protect on their territories. 2. This limitation has prevented the accession of countries which do not know the concept of appellation of origin. if the characteristic qualities are not due essentially. in order to be protected under the Lisbon Agreement. 2.725 Article 2(1) contains a definition according to which appellation of origin means “the geographical name of a country. it includes natural factors. to the geographical environment. the nature of the product) must be determined. Therefore. traditions in manufacture and skilled staff can be shifted from one geographical area to another. the quality and characteristics of which are due exclusively or essentially to the geographical environment. Such an official act is required because the specific elements of the object of protection (the geographical area. region or locality which serves to designate a product originating therein. constitutes the appellation of origin which has given the product its reputation. or a judicial decision. such as soil or climate. but only to a small extent. the appellation of origin must fulfill two conditions. recognized and protected as such in the country of origin and registered at the International Bureau of WIPO. including natural and human factors. This link.” It follows that only names conforming to the definition may be protected by virtue of the Lisbon Agreement. The first condition is that the appellation of origin must be recognized and protected as such in the country of origin (the latter being defined in Article 2(2)). if the qualitative link is insufficient. may subsequently have been stretched to the point that its existence is difficult to prove. the appellations of origin of products of the other countries party to the Lisbon Agreement. the lawful users of the appellation of origin.” .727 Even if interpreted broadly. and human factors. such as the special professional traditions of the producers established in the geographical area concerned. which may have existed at the start of the manufacture of an industrial product.Chapter 2 . region or locality referred to. 2. 2. Articles 5 and 7 of the Agreement itself and the Regulations set forth the procedure for international registration. The second element of the definition is that the appellation of origin must serve to designate a product originating in the country. 2. This condition means that it is not sufficient for the country in question to protect its appellations in a general way. or the country in which is situated the region or locality whose name. the name is not an appellation of origin but merely an indication of source. Moreover. even though the presence of purely human factors would be considered sufficient.726 The first element of the definition is that the appellation must be the geographical name of a country. The third element of the definition is that there must be a qualitative link between the product and the geographical area: the “quality and characteristics” must be due exclusively or essentially to the geographical environment. region or locality.

731 Article 5(1) and the corresponding provisions of the Regulations issued under the Lisbon Agreement define the procedure for international registration. on the other. In all countries not having made a declaration of refusal.). are to be applied. even if the true origin of the product is indicated or if the appellation is used in translated form or qualified by terms such as “kind”. public or private. or the international registration has been canceled by the International Bureau at the request of the Office of the country of origin. grant them a maximum of two years in which to terminate such use. The national Office. the registered appellation enjoys protection. Any usurpation or imitation of the appellation is prohibited. The International Bureau of WIPO has no competence to examine the application with respect to substance. Under Article 5(2) of the Lisbon Agreement. the Office of that country may. whether public or private. Article 7 provides that the registration need not be renewed and is subject to payment of a single fee. if third parties have been using the appellation in a given country prior to the notification of the registration. 2. The grounds which may be so indicated are not restricted by the Lisbon Agreement. Article 8 refers to national legislation. “type”. Law and Use 2. 2. the International Bureau notifies the registration without delay to the Offices of the countries party to the Lisbon Agreement and publishes it in its periodical “Les Appellations d’origine” (Rule 7 of the Regulations).732 In accordance with Article 5(3) to (5). In addition to any sanctions applicable pursuant to the Paris Convention and the Madrid Agreement (Article 4). . does not apply in its own name for international registration. Article 6 provides that an appellation which has been granted protection cannot be deemed to have become generic. under Article 5(6) of the Lisbon Agreement.733 The protection conferred by international registration is unlimited in time. according to Article 3 of the Agreement. “titulaire du droit d’user”)” the appellation. International registration must be applied for by the competent Office of the country of origin. It specifies that the right to take action belongs to the competent Office and the public prosecutor. An international registration ceases to have effect only in two cases: either the registered appellation has become a generic name in the country of origin.736 A list of the countries party to the Lisbon Agreement can be found in the appropriate document inserted in the back flap of this publication. the Lisbon Agreement does not establish a standard with respect to the sanctions to be provided for by the States party to it. but in that of “any natural persons or legal entities.128 WIPO Intellectual Property Handbook: Policy. whether civil (injunctions restraining or prohibiting unlawful acts. is very extensive. however. within a period of one year from the receipt of the notification of registration. it may only make an examination as to form. etc. “make”. penal or administrative. whether a natural person or a legal entity. and to any interested party. all the sanctions provided for in national legislation. or the like. However. actions for damages.735 With regard to the enforcement of the protection of an appellation of origin registered under the Lisbon Agreement. 2. this in fact gives each country the discretionary power to protect or refuse to protect a registered appellation of origin. according to the applicable national legislation. 2. on one hand. and therefore may not be requested by interested parties. “imitation”. Apart from the time limit mentioned. declare that it cannot ensure the protection of a given appellation. as long as it is protected as an appellation of origin in the country of origin. having a right to use (in French. the Office of any State party to the Lisbon Agreement may. 2.734 The content of the protection afforded to an appellation of origin registered under the Lisbon Agreement. However. the right of refusal is subject to only one condition: the grounds for refusal must be indicated.

The agreement usually also specifies the kind of protection that is to be granted.” .’ ‘type.3 deals specifically with the registration of trademarks.4.2 is supplemented by Article 22. Although in general useful. It reads as follows: “Each Member shall provide the legal means for interested parties to prevent use of a geographical indication identifying wines for wines not originating in the place indicated by the geographical indication in question or identifying spirits for spirits not originating in the place indicated by the geographical indication in question. In general..2. In respect of geographical indications. Provisions of The TRIPS Agreement on Geographical Indications 2.” 2.Fields of Intellectual Property Protection 129 Protection of Geographical Indications at the International Level through the Provisions of Bilateral Agreements 2. an inevitable diversity of standards.740 Article 22.739 Article 22. such bilateral agreements consist of lists of geographical indications which were drawn up by the contracting parties and an undertaking to protect the geographical indications of the respective contracting parties. resulting therefrom. i. Article 22.’ ‘imitation’ or the like. if the use of those trademarks for such goods would be misleading as to the true place of origin of the goods.4 stipulates that the protection under Article 22. bilateral agreements cannot constitute an entirely adequate solution to the problem of the lack of international protection because of the multiplicity of negotiations required and. geographical indications that are literally true. containing or consisting of a geographical indication.the use of any means in the designation or presentation of a good that indicates or suggests that the good in question originates in a geographical area other than the true place of the origin in a manner which misleads the public as to the geographical origin of the good. Members shall provide the legal means for interested parties to prevent: . either ex officio. 2.any use which constitutes an act of unfair competition within the meaning of Article 10bis of the Paris Convention (1967). if the applicable law so allows. for goods not originating in the territory indicated. even where the true origin of the goods is indicated or the geographical indication is used in translation or accompanied by expressions such as ‘kind.’ ‘style. Section 3 of the TRIPS Agreement is dedicated to geographical indications. or at the request of an interested party.737 A further possibility of international protection of geographical indications is the conclusion of bilateral agreements between two states. . A number of countries have entered into such agreements.1 provides for additional protection for geographical indications for wines and spirits.738 Part II.3 and 22. which reads as follows: “2.e. The general norm of protection is provided by Article 22. although they falsely represent to the public that the goods on which they are used originate in a different territory.Chapter 2 .1 to 3 must also be made available in respect of the use of deceptive geographical indications.741 Article 23. The remedy that must be available in that situation is refusal or invalidation of the trademark registration. 2.

748 Protection against unfair competition has been recognized as forming part of industrial property protection for almost a century.746 The second exception relates to rights in trademarks (Article 24.1 is supplemented by a paragraph dealing specifically with the registration of trademarks for wines containing or consisting of a geographical indication for wines. where the wines and spirits in question do not have the indicated geographical origin. and the registration of a trademark for spirits containing a geographical indication for spirits. 2.1 has a footnote with the following wording: “Notwithstanding the first sentence of Article 42. or. instead provide for enforcement by administrative action. it is identical with the customary name of a grape variety existing in the territory of that Member as of the date of entry into force of the TRIPS Agreement. in connection with goods or services by any of its nationals or domiciliaries who have used that geographical indication in a continuous manner with regard to the same or related goods or services in the territory of that Member. Registration of trademarks falling under that provision has to be refused or canceled.742 Article 23.4) gives the right to WTO Members to allow continued and similar use of a particular geographical indication of another Member identifying wines or spirits. there are three categories of exceptions. 2. continued and similar use of geographical indications for wines and spirits. 2. where the right to the trademark was acquired by use. Members may. Broadly speaking. that this recognition was first manifested by the insertion of Article 10bis .747 The third exception (Article 24. Protection Against Unfair Competition Introduction 2. in good faith. namely. either ex officio if the applicable law so allows. or before the geographical indication in question is protected in its country of origin.” 2. It basically states that the implementation of the Section on geographical indications by a WTO Member is without prejudice to the registration of trademarks identical with or similar to geographical indications. Law and Use 2.743 Article 23. prior good faith trademark rights. 2. that trademark must have been used. 1994.130 WIPO Intellectual Property Handbook: Policy. if the following conditions are fulfilled: an application for the registration of such a trademark must have been filed. either for at least 10 years preceding April 15. It was in 1900. in the WTO Member concerned. and generic designations.5).745 The first exception (Article 24. to the application for registration of such trademarks. before the TRIPS Agreement became applicable in that Member. where the geographical indication is used for products of the vine. or at the request of an interested party.744 Article 24 contains a number of exceptions to the obligations under Articles 22 and 23. with respect to these obligations. at the Brussels Diplomatic Conference for the Revision of the Paris Convention for the Protection of Industrial Property (hereinafter referred to as the Paris Convention). or in good faith preceding that date. or the right to use such trademarks.6) is related to geographical indications of a WTO Member which are considered by another WTO Member to be a term customary in common language as the common name for goods or services or. or the trademark must have been registered.

or the quantity. in cases where an invention or a sign is not protected by such a right. There is another example of this kind in the field of inventions: if an invention is not disclosed to the public and is considered to constitute a trade secret. for example the case referred to in Article 10bis(3)2 of the Paris Convention. on the one hand. and protection against acts of unfair competition on the other.750 The above examples show that protection against unfair competition effectively supplements the protection of industrial property rights. protection against unfair competition is based not on such grants of rights but on the consideration—either stated in legislative provisions or recognized as a general principle of law—that acts contrary to honest business practice are to be prohibited. namely that of a false allegation in the course of trade of such a nature as to discredit a competitor. or the industrial or commercial activities. the Article now reads as follows (in the Stockholm Act (1967) of the Paris Convention): “(1) The countries of the Union are bound to assure to nationals of such countries effective protection against unfair competition. such as patents and registered trademarks. other cases of unfair competition. in which protection against unfair competition does not perform such a supplementary function. Whereas those industrial property rights are granted on application by industrial property offices and confer exclusive rights with respect to the subject matter concerned. the goods.indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature. Any act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition. in many countries unauthorized use of a trademark that has not been registered is considered illegal on the basis of general principles that belong to the field of protection against unfair competition (in a number of countries such unauthorized use is called “passing-off”). For example. the characteristics. of a competitor. the goods. the link between the two kinds of protection is clear when certain cases of unfair competition are considered.Chapter 2 .” 2.749 At first glance. of course. As a result of the subsequent revision conferences. such as patents. as will be discussed in the analysis below. of the goods.false allegations in the course of trade of such a nature as to discredit the establishment.. registered trademarks. .Fields of Intellectual Property Protection 131 in the Convention. of a competitor. . etc. the suitability for their purpose. the manufacturing process. This is due to the fact that the notion of unfair competition covers a great variety of acts.all acts of such a nature as to create confusion by any means whatever with the establishment. Nevertheless. there seem to be basic differences between the protection of industrial property rights. Indeed the performance of certain acts in relation to an invention that has been disclosed to the public and is not patented or in respect of which the patent has expired. There are. may under very special circumstances also be illegal (as an act of “slavish imitation”). registered industrial designs. . The following in particular shall be prohibited: . or the industrial or commercial activities. 2. the unauthorized performance by third parties of certain acts in relation to that trade secret may be illegal.

756 Fair play in the marketplace cannot be ensured only by the protection of industrial property rights. acts of unfair competition are liable to occur. In order to prevent unfair competition effectively.752 Sometimes economic competition has been compared to competition in sport. Free competition between enterprises is considered the best means of satisfying supply and demand in the economy and of serving the interests of consumers and the economy as a whole. In particular. at least in certain areas. such as misleading advertising and the violation of trade secrets.755 The rules on the prevention of unfair competition and those on the prevention of restrictive business practices (anti-trust law) are interrelated: both aim at ensuring the efficient operation of a market economy. If self-regulation is well developed and generally observed. because in both the best should win. They do so in different ways. it can even be faster. ranging from illegal but harmless acts (which can be committed by the most honest and careful entrepreneur) to malicious fouls.754 Self-regulation has not proved to be a sufficient safeguard against unfair competition. 2. 2. regardless of prevailing political or social systems. Violations of the basic rules of economic competition can take various forms. consumers become less able to act as referees. and protection thereunder must be independent of any formality such as registration. less expensive and more efficient than any court system. unfair competition law must be flexible. which allow free competition between industrial and commercial enterprises within certain limits defined by law. A wide range of unfair acts.132 WIPO Intellectual Property Handbook: Policy. however. However. Often they are not even in a position to detect by themselves acts of unfair competition. intended to harm competitors or mislead consumers. however. . Yet both laws are equally important. 2. that should be the enterprise providing the most useful and effective product or service on the most economical and (to the consumer) satisfying terms. and supplement each other. if all participants play according to a certain set of basic rules. self-regulation must. In theory consumers. is different. This phenomenon has been discernible in all countries and at all times.751 A number of countries both in regions of the developed and developing world. Such flexibility does not necessarily entail a lack of predictability. Indeed it is the consumer who—along with the honest competitor—has to be protected against unfair competition. although in different respects. are usually not dealt with by the specific laws on industrial property. unfair competition law must be able to adapt to all new forms of market behavior. are adopting or have adopted market economy systems. This result can only be achieved. Unfair competition law is therefore necessary either to supplement the laws on industrial property or to grant a type of protection that no such law can provide. In order to fulfill this function. in their role as referees of economic play. 2. could deter dishonest entrepreneurs by disregarding their goods or services and favoring those of honest competitors. let alone react accordingly. As an economic situation becomes more complex. where there is competition. be supplemented by a system of legal enforcement. while unfair competition law is concerned with ensuring fairness in competition by forcing all participants to play according to the same rules. In economic competition. Yet it stands or falls on continuing observance by all participants. Law and Use The Need for Protection 2. 2.753 Experience has shown that there is little hope of fairness in competition being achieved solely by the free play of market forces. Reality. however: anti-trust law is concerned with the preservation of the freedom of competition by combating restraints on trade and abuses of economic power.

the legal basis for the protection against unfair competition may thus be found not only in national legislation but also at the international level.761 Article 10bis(2) of the Paris Convention defines unfair competition as any act of competition contrary to honest practices in industrial or commercial matters. and Article 10bis contains an express provision on the repression of unfair competition. 2. namely that of competitor protection.762 Article 10bis(3) of the Paris Convention gives three examples of cases that “in particular” have to be prohibited. the legal basis for the repression of unfair competition can range from a succinct general tort provision to detailed regulation in a special statute. for example slavish imitation. This definition leaves the determination of the notion of “commercial honesty” to the national courts and administrative authorities. The reason for this diversity of approaches is often purely historical. In the more than one hundred and fifty States party to the Paris Convention. comprehensive statute. provided that this is not contrary to the laws of the country concerned and does not exceed the rights normally granted to national associations. trademarks. Member States of the Paris Union are also free to grant protection against certain acts even if the parties involved are not competing against each other. These examples must not be seen as exhaustive. indications of source and appellations of origin among the objects of industrial property protection.757 All countries that have established market economy systems have devised some kind of safeguard against unfair business practices. In doing so. the countries of the Paris Union are bound to ensure effective protection against unfair competition.Fields of Intellectual Property Protection 133 The Legal Basis for Protection Development of Unfair Competition Law 2. 2. and takes into account the interests of both competitors and consumers.758 In more recent times many countries have passed special legislation on the subject or have replaced earlier laws on unfair competition. The first two—creating confusion and discrediting—can be regarded as belonging to the “traditional” field of competition law. Hungary adopted a Law on the Prohibition of Unfair Market Practice in 1990 which regulates unfair competition and anti-trust law.Chapter 2 . While in other areas of industrial property law. measures must be taken to permit federations and associations representing interested industrialists. Article 10ter(1) of the Convention further provides for the obligation to ensure “appropriate legal remedies. such as those dealing with patents. 2. As regards recent legislative activity in this area. it is generally agreed that protection is best afforded by a specific.760 Under Article 10bis(1) of the Paris Convention. industrial designs. they have chosen quite different approaches. Spain’s Unfair Competition Law of 1991 contains a detailed regulation on practices harmful to consumers and competitors. International Protection: Property Article 10bis of the Paris Convention for the Protection of Industrial 2. but rather as the minimum protection that has to be granted by all member States.759 Article 1(2) of the Paris Convention mentions the repression of unfair competition along with patents. trade names. however. designs or marks. 2. The third one—misleading—was added by the 1958 Revision Conference in Lisbon. .” In particular. Switzerland adopted a Law Against Unfair Competition in 1986 which contains a broad general provision and a detailed regulation of specific market behavior. utility models. producers or merchants to take action. and in 1991 Belgium adopted a Trade Practices and Consumer Protection Law which emphasizes the idea of consumer protection.

Although they are not obliged to introduce special legislation for the purpose. manufacturer. The authorities shall not be bound to effect seizure of goods in transit.134 WIPO Intellectual Property Handbook: Policy. . the Madrid Agreement for the Repression of False or Deceptive Indications of Source on Goods and the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration. then. or any interested party. If the legislation of a country permits neither seizure on importation nor prohibition of importation nor seizure inside the country. If the legislation of a country does not permit seizure on importation.764 According to Article 10bis(1) of the Paris Convention. For example. to which Article 10 refers. National Protection: Three Main Approaches to Unfair Competition Law 2. along with bilateral treaties. these measures shall be replaced by the actions and remedies available in such cases to nationals under the law of such country. Special agreements concluded within the Paris Convention. they must provide—at least on the basis of existing general legislation—effective safeguards against all acts “contrary to honest trade practices” and specifically against the practices referred to in Article 10bis(3). in conformity with the domestic legislation of each country. three main approaches can be distinguished. namely. Articles 6sexies and 8 provide for the protection of service marks and trade names. results from Article 10 and Article 9. the member States of the Paris Union have to provide effective protection against unfair competition. the Paris Convention contains several provisions relevant to protection against acts of unfair competition in a broader sense. Law and Use 2. or any other competent authority. seizure shall be replaced by prohibition of importation or by seizure inside the country. Seizure shall likewise be effected in the country where the unlawful affixation occurred or in the country into which the goods were imported. In the implementation of these treaty obligations. whether a natural person or a legal entity.763 Apart from Articles 10bis and 10ter. “Article 9 All goods unlawfully bearing a trademark or trade name shall be seized on importation into those countries of the Union where such mark or trade name is entitled to legal protection. or merchant. until such time as the legislation is modified accordingly. to the extent that it is not provided by Article 10bis(3). especially those concerning trademarks and trade names. respectively. Seizure shall take place at the request of the public prosecutor. The protection of indications of geographical origin. Article 10 The provisions of the preceding Article shall apply in cases of direct or indirect use of a false indication of the source of the goods or the identity of the producer. specifically provide for the international protection of geographical indications.

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Any producer, manufacturer, or merchant, whether a natural person or a legal entity, engaged in the production or manufacture of or trade in such goods and established either in the locality falsely indicated as the source, or in the region where such locality is situated, or in the country falsely indicated, or in the country where the false indication of source is used, shall in any case be deemed an interested party.” Protection Based on Specific Legislation 2.765 Several countries have enacted special statutes or specific provisions within broader statutes, which, sometimes combined with provisions in general statutes such as the Civil Code, deal with protection against unfair competition. These statutes provide for civil or criminal sanctions and contain a broad general provision (often modelled on Article 10bis(2) of the Paris Convention) which is supplemented by detailed provisions on specific forms of unfair trade practice; they usually provide for civil sanctions and, in respect of specific cases, also for criminal sanctions. Although many of these countries have also enacted additional legislation concerning acts relating to certain products (food, drugs, etc.), the media (television) or marketing practices (gifts, bonuses), the statute against unfair competition remains the main basis for protection. Often the scope of that statute has been made even broader by the assumption that the violation of any other law can be an unfair trade practice because it gives an undue advantage in competition over the law-abiding competitor. In some countries the concept of a special law on competition has evolved towards the adoption of a more general law on market behavior, or the link with anti-trust law is stressed by the enactment of statutes that deal with the institution of competition itself as well as with fairness in competition. Protection Based on General Tort Law and/or on the Law Concerning “Passing-Off” and Trade Secrets 2.766 In a group of countries with a civil law tradition, which follow the approach consisting of the protection of the honest businessman, such protection is usually to be found in the general tort law. In another group of countries which follow common law traditions, the actions for passing-off and for violation of trade secrets developed by the courts (at least originally) remain the main basis for the protection of competitors. As for the protection of consumers, a number of the same two groups of countries have, in addition, enacted separate sets of laws regulating specific cases of undesirable market behavior, such as misleading advertising, price comparisons, lotteries, games and bonuses; those laws are essentially independent of the protection of competitors under civil law or common law principles. Combination of the Above Two Approaches 2.767 Most countries party to the Paris Convention—even those that at first attempted to regulate unfair competition by means of general tort law—provide for a combination of general civil code principles, case law and special laws. In many countries with a federal structure, the division of legislative competence between the federal legislature and the legislatures of the federated States has led to an even more complex combination of the various forms of protection. In some of those countries, the federal legislator even has no jurisdiction over unfair competition to the extent that it is considered a State common law tort. Where, in such countries, protection is granted by the States, it is in general better developed than that granted at the federal level. In the United States of America, in particular, the limited availability of common law remedies against unfair competition was first dealt with in federal law through the establishment of an administrative authority (the Federal Trade Commission), and more recently through the extension of a federal law provision on trademarks (Article 43(a) of the trademark law (Lanham Act)) to a wide variety of misleading representations. Yet the most progressive regulation is to be found in the “business laws”, “little

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FTC Acts”, “Consumer Protection Laws” and other legislation adopted by States within the United States of America. The Role of Jurisprudence 2.768 In spite of the different approaches mentioned above, all countries that have introduced effective safeguards against unfair competition take particular care over the enforcement of the law, and usually allow their courts considerable discretion. The success of an unfair competition law depends largely on what the courts make of it. A few words in a general tort provision may be a sufficient basis on which to develop an efficient system of unfair competition law, while a most impressively drafted statute may give disappointing results. This does not mean, however, that an explicit and detailed regulation of unfair trade practices is not useful: it will at least have some preventive effect on market behavior; but it will remain ineffectual if it is not activated by the courts. In the ever-changing world of competition, even the most perceptive legislator cannot possibly anticipate all future forms of unfair market behavior and must rely on interpretation of the law by the courts. Many countries have therefore supplemented their explicit provisions against certain market practices with a general provision, which allows the courts to include new forms of unfair market practice in the general system. The Acts of Unfair Competition General Definition 2.769 According to Article 10bis(2) of the Paris Convention, unfair competition consists of “any act of competition contrary to honest practices.” Most countries with special laws on unfair competition have adopted the same or similar definitions for their general provision—using such terms as “honest trade practices” (Belgium and Luxembourg), “the principle of good faith” (Spain and Switzerland), “professional correctness” (Italy) and “good morals” (Germany, Greece and Poland). In the absence of specific legislation, the courts have defined fair competition with phrases like “the principles of honesty and fair dealing” or “the morals of the marketplace” (United States of America). 2.770 It is true that describing unfair competition as acts contrary to “honest trade practices”, “good faith” and so on does not make for clear-cut, universally accepted standards of behavior, since the meaning of the terms used is rather fluid. The standard of “fairness” or “honesty” in competition is no more than a reflection of the sociological, economic, moral and ethical concepts of a society, and may therefore differ from country to country (and sometimes even within a country). That standard is also liable to change with time. Furthermore, there are always new acts of unfair competition, since there is ostensibly no limit to inventiveness in the field of competition. Any attempt to encompass all existing and future acts of competition in one sweeping definition— which at the same time defines all prohibited behavior and is flexible enough to adapt to new market practices—has so far failed. 2.771 This does not mean, however, that unfair competition cannot be encompassed by any general definition. It has been generally recognized that certain acts of commercial behavior are always (or, as Article 10bis(3) of the Paris Convention puts it, “in particular”) considered to constitute unfair competition. The most notable of those acts are the causing of confusion, discrediting and the use of misleading indications. The common aspect of these most important, but by no means exhaustive, examples of unfair market behavior is the attempt (by an entrepreneur) to succeed in competition without relying on his own achievements in terms of

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quality and price of his products and services, but rather by taking undue advantage of the work of another or by influencing consumer demand with false or misleading statements. Practices that involve such methods are therefore doubtful at the outset as to their fairness in competition. 2.772 Another reference point could be the subjective element in the unfair act. At first sight, the notion of “honesty” seems to refer to a moral standard, and some sort of legal/ethical standard is indeed involved. This, however, has to be distinguished from the question whether an act of unfair competition can be established in the absence of any fault, bad faith or negligence. Where unfair competition law has been developed on the basis of general tort provisions, the “tort of unfair competition” requires some kind of subjective element such as “fault” or “bad faith.” In practice, however, the element of fault or bad faith is often assumed by the courts. 2.773 The most important factor for determining “unfairness” in the marketplace, however, is derived from the purpose of unfair competition law. In this respect, unfair competition law was initially designed to protect the honest businessman. In the meantime, consumer protection has been recognized as equally important. Moreover, some countries put special emphasis on the protection of the public at large, and especially its interest in the freedom of competition. Modern unfair competition law therefore serves a threefold purpose, namely: the protection of competitors, the protection of consumers and the safeguarding of competition in the interest of the public at large. 2.774 One party who is always “concerned” is the honest businessman. Since unfair competition law started as a special law for the protection of the honest businessman, a businessman’s standard of behavior logically serves as a starting point. A practice that is condemned as improper by all businessmen can, therefore, hardly qualify as a “fair” act of competition. 2.775 On the other hand, certain practices may be generally accepted within a branch of business but nevertheless considered “improper” by other market participants. In such cases, there has to be some ethical correction of the actual standards of behavior. Ethical standards dictate in particular that the interests of consumers must not be unnecessarily impaired, for example, by disregard for the principle of truthfulness (on which the consumer relies in his transactions), by enticement of the consumer into unsocial or even harmful behavior or by invasion of his privacy. 2.776 Furthermore, there may be practices that at first sight are not prejudicial either to other businessmen or to consumers, but nevertheless may have unwanted effects on the economy at large. For example, selling at dumping prices may in the long run destroy small- and medium-sized businesses, and thus have adverse effects on free competition. Where these economic aspects are incorporated in unfair competition law, such behavior will often be expressly labelled as “unfair.” 2.777 When determining “honesty” in business dealings, all these factors have to be taken into account. In practice, the concept of unfair competition has increasingly become a balancing of interests. Differences in the evaluation of what is “fair” or “unfair” can generally be explained by the different emphasis placed on the aspects referred to above. For example, a particular kind of market behavior may well be seen differently in countries where the traditional law of unfair competition still focuses on the protection of the honest competitor, as opposed to countries that put special emphasis on the protection of consumers or the public at large. 2.778 On the other hand, there is broad agreement that at least some acts and practices are always irreconcilable with the notion of fairness in competition. These are discussed in detail below.

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Categories of Acts of Unfair Competition 2.779 For the purposes of establishing categories of acts of unfair competition and facilitating their analysis in this study, two broad groups of acts of unfair competition are distinguished, namely acts of the types expressly mentioned in Article 10bis of the Paris Convention and acts not expressly mentioned in Article 10bis. 2.780 Article 10bis(3) contains a non-exhaustive list of three types of acts of unfair competition, namely, acts likely to cause confusion, acts that discredit a competitor, and acts that may mislead the public. Because the acts that are likely to cause confusion and those that may mislead the public are akin to one another and sometimes overlap, they are dealt with before the act of discrediting a competitor. 2.781 There are a number of acts not mentioned in Article 10bis which have been recognized by the courts as unfair practices and which, increasingly, have become the subject of legislative provisions. Of particular interest in this connection is the trend towards explicit protection of trade secrets by express provisions in unfair competition laws, and the continuing evolution of provisions governing the practice of comparative advertising. Moreover, there has been an increasing recognition of the need to grant protection against undue “misappropriation” of, or “free riding” on, the achievements of competitors, regardless of the availability of specific industrial property rights, provided that, under the circumstances of the case, such acts are found to be unfair. Causing Confusion General Circumstances Under which Confusion is Established 2.782 Article 10bis(3)1 of the Paris Convention obliges member States to prohibit all acts that are of such a nature as to create confusion, by any means, with the establishment, the goods or the industrial or commercial activities of a competitor. The scope of Article 10bis(3)1 is very broad, as it covers any act in the course of trade involving a mark, sign, label, slogan, packaging, shape or color of goods, or any other distinctive indication used by a businessman. Thus not only indications used to distinguish goods, services or businesses but also the appearance of goods and the presentation of services are considered relevant for the prohibition of confusion. 2.783 Under Article 10bis(3)1 of the Paris Convention, the “intent” to confuse is immaterial for the purposes of determining whether such an act constitutes an act of unfair competition. However, bad faith on the part of the imitator may have a bearing on the sanctions to be applied. Also, it is not usually necessary for confusion actually to have occurred, as the likelihood of confusion is often sufficient for an action based on unfair competition. Finally, protection against confusion is provided without any limitation in time. Protection is available as long as confusion is likely, but sufficient latitude is allowed for the use of non-confusing indications in respect of products, services and businesses, so that competition in the relevant market is not stifled. However, as soon as the marketable creation becomes generic or commonplace, it loses its original or distinctive character, and likelihood of confusion may no longer be assumed to the same degree. 2.784 There are two main areas in which confusion frequently occurs. These are indications of commercial origin on the one hand, and the appearance of goods on the other. However, this does not preclude or limit the protection of other attributes or achievements against confusion.

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Types of Confusion 2.785 Confusion can be established in different ways. The test for the basic type of confusion is whether the similar mark so resembles the protected mark that it is liable to confuse a substantial number of average consumers as to the commercial source of the goods or services. Factors frequently considered in determining confusion are the degree of distinctiveness of the protected mark, the size and reputation of its owner, the sophistication of the consumers concerned and, of course, the similarity of the marks and the goods or services involved. In many countries, confusion is not restricted to basic confusion as to the commercial source, but also includes that which gives the impression of a strong business connection between the two users of the same trademark or similar trademarks, i.e., confusion as to affiliation. However, the use of an identical or similar mark on clearly unrelated or completely different goods usually falls outside the scope of protection, as a large degree of dissimilarity of the goods or services involved will lead consumers to assume that the source of the goods or services is not the same and also that there is no particular business connection between the users. 2.786 A third form of confusion that has been referred to, for example, under Section 43(a) of the Lanham Act of the United States of America and under Section 53 of the Australian Trade Practices Act, is called confusion as to sponsorship. Under this test for confusion, consumers will assume both that the goods or services do not originate from the same source and that the two enterprises do not entertain business relations so intensive and continuous as to cause confusion as to affiliation. Nevertheless, the consumer will expect, from the similarity of the marks, from the types of product or service that the mark is used for and from the manner of use by the second user, that the use of the protected mark by the second user has been authorized by agreement for a certain period of time. This type of confusion can be relevant, for example, in cases where the third party uses the mark (without authorization) for ornamental purposes on goods. However, unlike confusion as to source or affiliation, this third type of confusion has not the same status as other fully established grounds for relief under statutory trademark laws, as its exact boundaries are still developing. 2.787 This concept of confusion may be relevant to so-called “publicity” rights, relating to well-known artists and media or sports personalities, and to “merchandising” rights, relating to fictional characters in literary or artistic works. These rights concern relatively new marketing techniques whereby enterprises are “licensed”, for a certain period of time, to make use of the popularity or fame symbolized by the names or likenesses of certain personalities or characters, as this use is expected to stimulate consumer demand for the product or service of the “licensee.” Consumers would generally be misled by the use of the name or likeness of the personality or character in connection with the product or service into believing that the personality or the owner of rights in the character, which could also be a registered mark, had expressly authorized the use of their personality or character. Confusion with Respect to Indications 2.788 An indication can be any sign, symbol or device that conveys to the consumer the message that a product or service on the market comes from a particular commercial source, even if this source is not known by its name. Indications may therefore consist of two-dimensional or three-dimensional signs, labels, slogans, packaging, colors or tunes, but are not limited to these. Protection against confusion with respect to indications is already available under specific legislation on trademarks, service marks and trade names. However, this protection is often limited in several ways. The limitations may concern the applicability of the specific law to certain types of indication, or the exact scope of protection. Thus protection against confusion under unfair competition law may still be relevant where the specific legislation does not afford overall protection against

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confusion. This aspect is also relevant to the protection of well-known marks against confusion, as required by Article 6bis of the Paris Convention. 2.789 The general applicability of trademark law is usually confined to particular indications. Some countries do not, for example, recognize titles of single literary works or films, get-up (product appearances), shop interiors, colors or color combinations, or trade dress under statutory trademark law. As regards service marks, although most countries have a system for the registration of such marks in the same way as trademarks, in those that do not, protection under the rules of prevention of unfair competition is needed. Also, even in countries where three-dimensional trademarks are recognized and registrable, particular shapes may nevertheless be excluded. For example, shapes determined solely by the nature of the goods, appearances resulting from some technical or industrial function of the goods and product configurations determining the essential value of the goods are expressly excluded by the EC Directive to Approximate the Laws Relating to Trade Marks. The “functionality” doctrine, particularly developed in the United States of America, produces similar results. 2.790 Apart from this, protection under trademark law can sometimes be invoked only for marks that have been properly registered in the country where protection is sought. In this respect Article 6bis of the Paris Convention constitutes an exception in favor of a well-known mark, which does not need to be registered in order to be protected against the potentially confusing use of a mark that is a reproduction or an imitation of the well-known mark and is used for identical or similar articles. It is to be noted that a trademark may be well-known in a country before it is registered or even used in that country, as a result of the advertising or reputation of the mark in other countries. The obligation to protect unregistered well-known marks is clarified and supplemented in the Joint Recommendation Concerning Provisions on the Protection of WellKnown Marks adopted by the WIPO General Assembly and the Assembly of the Paris Union in September 1999. 2.791 Unfair competition law may provide protection against confusion for indications or signs that are not protectable under trademark law. However, the availability of protection for a sign under unfair competition law will depend partly on the reasons for the lack of protection for unregistered signs under the special laws. If a sign can in principle be covered by the specific legislation but does not meet the substantive requirements of that legislation, it would not seem consistent with a balanced system of protection to grant that sign the same protection under unfair competition law as would be granted to it under the special law. It is therefore argued that protection against confusion should only be available under unfair competition law if the indication or sign to be protected has sufficient distinctiveness to distinguish the products, services or other business activities concerned from the same or similar activities of other traders. Nevertheless, in order to promote the registration of marks, some unfair competition laws require more than just a minimum degree of distinctiveness for the protection of unregistered indications. For example, Article 2(1) of the Unfair Competition Prevention Law of the Republic of Korea requires the indication to be “widely known”, which could in some cases restrict actual protection to one particular region. 2.792 The degree of distinctiveness of an indication that is not protected under statutory trademark law is assessed in relation to the same factors as apply to registered marks, including the meaning and the appearance of the indication, and its uniqueness compared with other indications for the same or a similar activity. Even if distinctiveness is inherently lacking, for example, owing to the descriptive nature of the indication for particular goods or services, the indication can be protected if it has acquired “distinctiveness by use”, or secondary meaning, in the country where protection is sought. Secondary meaning implies that, as a result of continuous and exclusive use of the mark on the market, a substantial number of consumers have become aware of it and will

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associate the activity carried on under it with a particular commercial source. In Germany, for example, the trademark “4711” for perfume has been considered sufficiently distinctive as a result of public awareness that the goods under that mark come from a particular source. In fact the degree of secondary meaning depends on the market for the goods or services involved and the degree of descriptiveness of the indication in relation to those goods or services. The degree of secondary meaning (or percentage of consumers) necessary to achieve sufficient distinctiveness varies according to the practices of the court concerned. In some countries, opinion polls or market surveys on consumer reactions often provide empirical data with which to determine the degree of secondary meaning, whereas in other countries the courts themselves will judge whether an indication has acquired sufficient distinctiveness. 2.793 Secondary meaning analysis also applies to indications that have been expressly excluded from statutory trademark protection. For example, the configurations or shapes of goods that are deemed to be excluded from statutory protection under trademark law by the EC Directive to Approximate Laws Relating to Trade Marks may still acquire secondary meaning among consumers in a particular market. Under those circumstances, protection against confusion is justified if consumers could be led to believe mistakenly that other goods using the configuration come from the first user. It may not always be easy, however, to establish the necessary degree of secondary meaning, since the particular configuration of the goods must be recognized by the relevant consumers as indicating a particular source. If the exclusion in the specific legislation is clearly intended to dismiss the indication as not worth protecting at all, for example, in the case of purely descriptive words, protection is likely to be denied also under unfair competition law. 2.794 Limitations on the scope of protection afforded by trademark law may also have the effect of allowing indications to be protected against confusion under unfair competition law. Although trademark laws usually grant protection against any potentially confusing use of a registered trademark, there may still be differences with respect to the exact scope of the protection against confusion. For example, protection against the use of the same or a similar mark might be restricted to those goods or services for which the mark is registered. If a mark identical or similar to the registered trademark is used for other goods or services and that use is likely to cause confusion, such protection might only be available under unfair competition law or passing-off principles. Generally, trademarks are protected against the use of identical or similar signs not only in respect of identical goods or services but also in respect of similar goods or services. This type of protection derives from what is sometimes called the “principle of speciality”, as the protection is related to the trademark’s primary function of distinguishing the goods of one enterprise from those of competitors and other market participants. Thus if trademark protection is not available because the goods or services involved are held to be dissimilar (although confusion as to source may in fact be possible), protection against confusion can be sought under unfair competition law. However, there are also trademark laws that consider the likelihood of confusion to be the sole criterion for protection, regarding the similarity of the goods or services involved as not decisive in itself, but only as one of several determining factors. This kind of statutory protection would encompass all types of confusion. 2.795 The criteria used to judge the similarity of indications are, with some minor differences, the same throughout the world. The determining factors include the common elements of appearance, pronunciation and meaning or verbal translation of the marks involved, but the decisive factor is the overall impression on the average consumer of the goods or services involved. Particularly if the goods are for mass consumption, the individual elements of the marks involved are less carefully examined by the average consumer. Since the two marks are as a rule not closely examined side by side, in practice the similarities between the indications are more important than the differences. The similarity of the goods or services depends largely on the question whether consumers would

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generally expect the goods or services to originate from the same source. However, they do not need to be either functionally interchangeable or competitive. 2.796 Protection against confusion may be too limited for so-called “well-known” marks and, in particular, for marks with an even higher reputation. Article 6bis of the Paris Convention requires member States to protect trademarks that are well known in their country against any potentially confusing use of similar trademarks, but that obligation is only relevant for identical or similar goods. In certain cases, the unauthorized use of well-known marks for different goods or services may nevertheless cause confusion among consumers. For example, if the mark has been used for a broad range of products and has been extensively advertised or is well known for the particular “image” of its proprietor, consumers might associate such a mark with a certain origin and quality consistency rather than with goods or services of a specific kind. Such associations can also cause confusion. The member States are not obliged under Article 6bis to grant this extended protection, but unfair competition law may be relevant. The question whether a trademark is “well-known” in a given country for the purposes of Article 6bis of the Paris Convention has to be decided in each case on the basis of the facts. Usually, the factual determination of the notoriety of a trademark is based on its reputation and image in the mind of the trade circles and consumer groups concerned at the place and time relevant in the particular case. Factors such as the mark’s inherent distinguishing power, the length of time that it has been used in the given country, the amount of advertising and other publicity given to it in various media and its established association with particular goods or services are often taken into consideration. The Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks obliges member States to protect well-known marks even beyond confusion under certain circumstances. According to Article 4(1)(b) of the Joint Recommendation a well-known mark has to be protected against the use of an identical or similar mark for dissimilar goods or services if such use: would indicate a connection between these goods or services and the owner of the mark and would be likely to damage his interests; is likely to impair or dilute in an unfair manner the distinctive character of the well-known mark; or would take unfair advantage of the distinctive character of the well-known mark; in the two last-mentioned cases, Member States may require that the well-known mark be well known by the public at large (Article 4(1)(c) of the Joint Recommendation).

2.797 Statutory trademark law frequently requires that the use of a similar mark must be a form of trademark use, that is, use as an indication of the commercial source of the products or services. Thus ornamental use, such as use on advertising material or as a mere decoration on goods, for instance on ballpoint pens or ashtrays, or even as the configuration of an actual product such as an earring in the shape of the mark, is not always regarded as falling within the scope of statutory trademark protection. Protection against this type of use could, however, be sought under unfair competition law. One example of a trademark law that is very extensive in the above respects is the Uniform Benelux Trademark Law of 1971, which provides a broad definition of registrable marks and protection against any use of an identical or similar trademark by others without proper justification that is likely to cause prejudice to the trademark proprietor. 2.798 Similar limitations on protection against the unauthorized use of traders’ or businesses’ indications are to be found in the protection of trade names. Trade names serve to identify and to distinguish an enterprise and its business activities from those of other enterprises. Article 8 of the Paris Convention imposes the obligation to protect trade names in all countries of the Paris Union,

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without specifying what kind of protection should be granted or how it should be given. Nevertheless, trade names must be protected without any obligation of filing or registration. Most countries already protect trade names against the risk of confusion. This protection applies not only where trade names are covered by a special law, but also where they are protected under special provisions of unfair competition law, civil law, company law or commercial law. As a general rule, a direct competitive relationship between the enterprises concerned is not decisive, but remains relevant in determining whether the use of the same or similar trade names might confuse consumers regarding the identity of enterprises or the relationship between them. The protection may extend beyond the particular field in which the prior trade name is used, as trade practice or the likelihood of expansion and diversification of the activities of the enterprise is frequently taken into account by the courts. Thus the scope of protection of trade names against confusion may sometimes be a little wider than the scope of protection of trademarks under trademark law. Confusion with Respect to Product Shapes 2.799 The actual shape of a product could also lead to confusion among consumers. If the shape is so well known that consumers will relate the product with a particular commercial source (as in the case of the “Coca-Cola” bottle), then the shape can be regarded as a protectable indication. 2.800 It must also be noted that specific legislation is available in many countries for the protection of industrial designs, either to complement or to replace copyright protection for works of so-called “applied art.” Such legislation usually prohibits the use of identical or similar product appearances for identical or similar goods. However, as with trademark legislation, protection under special laws on industrial designs is also limited in several ways, which vary significantly from country to country. In a manner similar to the specific protection under trademark laws, such limitations may concern the general applicability of the designs law to certain product appearances and also the exact scope of the protection granted by the specific legislation. For example, if the design protection of a surface decoration is limited to the use of the decoration on products for which the design is registered, protection against copying of the design for the decoration of other products may be obtained under unfair competition law, if the copied design is misleading or causes confusion as to the commercial source. 2.801 For protection against confusion concerning the products only, most requirements under unfair competition law are established by case law, frequently with reference to the practice of “slavish imitation.” Within this particular field of unfair competition law, it has often been stated that, as a principle inherent in the free market system, market participants are free to imitate designs or other shapes, appearances or visual characteristics of products that are not protected by specific laws such as patent, copyright, design or possibly trademark laws. Some of those specific laws even expressly preclude protection under unfair competition law for acts that are covered by the specific legislation if the design involved could be protected under that legislation. For example, Article 14(5) of the Uniform Benelux Designs Law of 1975 precludes actions to protect registrable designs under unfair competition law if protection could have been granted had the design been properly registered. Therefore, the mere risk of confusion as to the shape of the products will be insufficient to constitute unfair competition if the design would have been protectable under a specific law and product imitation would have been covered by that specific legislation. On the other hand, the risk of confusion as to the products may be sufficient to obtain protection under unfair competition if the design involved reveals a certain degree of originality but cannot be registered as a design owing to other requirements of the specific legislation, or if registration has been applied for but not yet secured. 2.802 If the design, shape or other characteristic non-functional features of the product are associated to a substantial degree by consumers with a certain source or origin, potential confusion

and special cases of misleading. Whether such potential confusion occurs in cases of imitation will be determined by the same factors as outlined above with respect to indications. as Article 10bis(3) of the Paris Convention states. 2. Moreover. In some countries it is accepted that the risk of confusion as to source can be reduced by the use of disclaimers. and it is by no means harmless. with adverse consequences for the economy as a whole and economic welfare. the same principles as outlined above will apply to the protection against confusion between product shapes under unfair competition law. A significant factor of this divergence is that misleading acts are primarily directed to the consumer and not directly to competitors. which may have particularly severe consequences. Misleading General 2. however. special cases of potential deception such as bonuses. such disclaimers are only seldom recognized as sufficiently reducing the risk of confusion. like a clearly visible statement ruling out the possible assumption that the product or service comes from a particular source.807 While. Even in countries where in the past protection against deception has been less strong than in others. recent developments indicate a move towards greater strictness. which may be done in good faith. after examination of the question whether the characteristic features of a product have acquired a sufficient degree of secondary meaning. countries have chosen quite divergent methods. relying on incorrect information. if the product’s appearance is not registered as a trademark. In addition. clearance sales and travelling sales are . It may well be the single most prevalent form of unfair competition. it is generally agreed that the prohibition of deception is essential to the concept of fairness in competition. However.144 WIPO Intellectual Property Handbook: Policy. and the product designs involved will be judged on their similarities. misleading can have quite serious consequences: the consumer.806 Consequently. The transparency of the market diminishes. thus adopting a civil law approach. most countries share the distinction between “normal” misleading. such as malicious misleading or deception in the health and drug field. However. In the search for effective legal solutions. However. For the most serious cases of misleading. Law and Use as to the source of the product will usually constitute an act of unfair competition. may suffer financial (or more harmful) prejudice. gifts. any indication or allegation that is likely to mislead. enforcement is left to the State enforcement authorities. has “in particular” to be regarded as being contrary to honest practice. the courts have developed a particularly abundant case law on misleading. or if particular forms are possibly excluded from statutory trademark protection. several countries have introduced criminal sanctions in addition to civil law remedies. 2. on the whole. Where consumer protection is primarily looked upon as a matter of criminal law.803 Protection against confusion as to the commercial source of a product may also be available under specific trademark law if the applicable trademark legislation provides for the protection of three-dimensional marks or the “get-up” of products. most member States of the Paris Union have included the prohibition of misleading acts or practices in their legal systems (or have even passed specific laws on the subject). that is. The honest competitor loses clients. 2. Or. the regulation of misleading makes a many-faceted picture.804 Misleading can roughly be defined as creating a false impression of a competitor’s own products or services. On the contrary. 2.805 Since truthfulness is rightly considered to be one of the main principles of honest trade practice. most of the countries that have specific legislation on unfair competition have included a provision against deception into the relevant laws.

because. there is a tendency to assume that the average consumer is generally well informed and intelligent enough to be immunized against most of the dangers of deception. For example. less critical consumer? How is the public reaction determined? Empirically or by an overall estimation by the judge himself? How many of the addressees must be likely to be misled for a statement to be considered misleading? 2. The different opinions as to what standards have to be applied are the result of different answers to the following questions: Is the prohibition of misleading meant to protect the average or (also) the less educated. so long as the indication or allegation has some enticing effect on the consumer. especially in advertising.808 In some countries the existing protection against misleading practices is to some extent a result of international harmonization.812 In a number of countries the relevant standards are set on the basis of the notion of the average consumer. it gives the misleading impression that the advertised fact is something out of the ordinary.809 There is a consensus according to which the concept of misleading is restricted neither to inherently false statements nor to statements that have actually led to a false impression on the part of the consumer. Even tighter restrictions are frequently imposed by self-regulatory institutions. in an objective sense. However. seldom stop at the border of a given country. for example.Chapter 2 . a false declaration to the effect that imported goods are domestic is misleading even if the imported goods are of superior quality.Fields of Intellectual Property Protection 145 often regulated in detail. Thus the European Community issued a Directive on Misleading Advertising in 1984 in order to set up a minimum objective criterion for determining whether advertising is misleading. Even statements that are literally correct can be deceptive. 2. the actual determination and evaluation of this reaction may differ from country to country and may also depend on the kind of addressee (consumers or traders) and the type of goods or services. If. Countries that are economically bound in a common market have a particular need for harmonization of diverging national laws on misleading. chemical ingredients are generally forbidden in bread. the courts of most countries would consider an advertising claim that a certain bread “was without chemical ingredients” to be deceptive. A certain degree of harmonization has also been reached among the Nordic and the African countries.810 It is likewise not necessary for the product in question to be inferior. but also affect the free circulation of goods and services. Where the courts base their assessments on the judges’ own experience. In those countries the . 2. The Concept of Misleading 2. misleading acts and practices. as does the EC Directive on Misleading Advertising. Different national laws not only result in different and thus at least to some extent inadequate levels of consumer protection. Instead it is considered sufficient (as it is by Article 10bis(3)3 of the Paris Convention) that the indications in question are likely to have a misleading effect. The Paris Convention leaves this question to member States.811 It is generally agreed that the question whether or not there is deception must be determined by the reaction of the addressee to the statement and not by the intention of its maker. if the public prefers domestic goods to foreign goods. 2. which in some countries have reached a particularly advanced state of development as regards protection against misleading. though literally true. Because of the internationalization of commerce and communication media such as television.

this is not done under the provisions on misleading. “Unobjective” or suggestive advertising which does no more than create vague positive feelings about a product is therefore outside the scope of misleading. posters and so on. labels. objective sense in order to be considered under the heading of misleading practices. the question of what is mere “hot air” or “puffing” and what is to be taken seriously is answered differently in . 2. If in some countries certain kinds of suggestion are forbidden. mainly consumer surveys. expects a certain characteristic to be present. oral or even symbolic—have to be taken into account. as Article 10bis(3) of the Paris Convention has. the concept of misleading is restricted to those indications that might cause misconceptions on the part of the consumer. in the absence of express information.813 However. since there is basic agreement that deceptions other than those in advertising are irreconcilable with “honest trade practice” and can therefore be judged under the general provision. if it is claimed that a particular slice of bread has fewer calories than others. On the other hand. 2. Although in all countries obvious exaggerations (even if literally inaccurate) are not considered deceptive because they can easily be recognized as “sales talk”. indication or presentation is made is immaterial.” In countries that have a general provision on unfair competition this difference is minimal. the omission of this information can create as strong an incorrect impression as an express statement would have done. most countries with special legislation have focused on misleading advertising. or alternatively the courts have recognized that such omission can be a misleading practice. who is easily influenced by false statements. The Communication of Misleading Statements 2. the tendency is to favor an average deception rate.817 A misleading communication does not necessarily have to be a positive one: a half-truth is always also a half-lie. there can only be deception if the public. Law and Use threshold is also considerably higher. the broader notion of “indication or allegation.818 The consequences of the different concepts of misleading can best be seen in the treatment of exaggerations. Communications may be in the form of trademarks. less critically prepared consumer. An omission cannot always be equated with a positive statement. brochures.815 It is further agreed that the exact way in which the allegation.146 WIPO Intellectual Property Handbook: Policy. and the interference threshold is set very low. Although it is frequently stressed that it is sufficient if a “not unsubstantial proportion of the addressees” are likely to be misled. Exaggerations 2. 2. Consequently. Other countries have chosen. So is the form of the message. some countries have expressly mentioned the omission of relevant facts in their lists of misleading practices. For example. 2. but rather under the general provision concerning honest trade practices. Since no businessman has the general duty to reveal adverse features of the product that he is offering. at 10 to 15 percent of the consumers.814 Since the main area of misleading in commerce is to be found in advertising. in Germany the emphasis is clearly on the less educated. misleading is concerned only with the effect a statement has on the addressee and not with the way in which the statement is communicated. All methods of communication—written.816 The communication need not contain “information” in a neutral. In general. Misleading is frequently proven by empirical methods. while this is solely due to the fact that it is thinner. television publicity spots. indication or presentation must therefore be able to create some sort of concrete impression which can be shown to be true or untrue. radio commercials. however. The allegation. however.

etc. However. consequently a specially strict standard is applied. The EC Directive on Misleading Advertising. “the nature. Thus. especially in advertising. in particular those in the form of claims of uniqueness. For example.820 A list of examples of misleading practices supplemented with a general provision is only possible. leaving the courts free to take other forms of deception into account. obliges member States to ensure the cessation of misleading “even without proof of actual loss or damage or of intention or negligence on the part of the advertiser. in practice. whereas trademark law itself would restrict the right of action to the trademark owner.Chapter 2 . even in the absence of any fault on the part of the advertiser. Misleading statements.” Countries that favor a civil law approach in the repression of unfair competition usually have few problems in doing so.819 Deceptive statements can be made on all relevant aspects of business matters. although in practice this difference is mitigated by the fact that usually the list of expressly named practices is fairly comprehensive. expressly refers to misleading statements in the endorsement of products or the passing-off of an advertisement as a press article. 2. On the other hand. any misleading references to the environment. On the other hand. the prohibition of deception should be broad enough to cover those new forms of misleading that the legislator has not thought of. or the quantity. are therefore not always made in bad faith. the suitability for their purpose.Fields of Intellectual Property Protection 147 different countries. consumer associations may bring an action in a case of misleading involving trademarks. the characteristics. Because of the difficulty of furnishing such evidence. and especially those that claim uniqueness (“the best. for example. Thus in the United States of America the courts have generally only intervened if the product advertised as the best is in reality inferior. it is assumed that the public basically believes all advertising statements. a statutory provision must give guidance to the courts. Recent legislation on unfair competition also mentions some “modern” examples of misleading. The Subject Matter of Misleading 2. Criminal law usually requires a relatively narrowly worded. Subjective Requirements 2. of course. the express inclusion of errors as to commercial origin under the heading of deception is significant in that the special procedure provisions of unfair competition law may be applied. Still other countries (and the EC Directive on Misleading Advertising) prohibit any deception with respect to the identity of the advertiser. this is often achieved by expressly naming those forms that “in particular” must be regarded as misleading. in principle.821 Even the most careful businessman can issue a statement that the public misunderstands in a way not foreseen by him. involve deception) are rather dealt with under the heading of confusion (or passing-off). namely. the first”. are expressly forbidden. In Hungary. This is interesting inasmuch as there seems to be basic agreement that these specific errors of identity (while they do. if the sanctions against misleading are predominantly those of civil law. the courts have gradually reduced the requirement of intent. which is largely covered by specific laws on trademarks and trade names.). enumerative prohibition. Usually at least the examples given in Article 10bis(3)3 of the Paris Convention are included. for example.” Often services and indications of geographical origin are also included. In countries with a predominantly civil law approach. However. This . at least in theory some subjective element is required. this “subjective” concept has proved a hindrance. Other countries (such as Italy and the United States of America) take the exact opposite position and tolerate generally formulated indications. however. but where the law against misleading conduct is essentially part of criminal law. The Greek Decree on Misleading Advertising. The same applies in Belgium. the manufacturing process. In some countries (such as Germany). of the goods. deception in competition has to be stopped in the interest of the consumer and of other competitors. among other things.

Discrediting.822 This primarily objective approach to the repression of misleading statements is. of a competitor. In all common law countries a (common law) tort of disparagement or discrediting is recognized. where the (criminal) prohibition of misleading advertising in Article 44 of the “Loi Royer” in theory still requires “bad faith”. Since it is primarily the individual businessman who suffers from disparaging remarks. Where unfair competition law has been developed on the basis of general tort provisions. the consumer is liable to suffer also.148 WIPO Intellectual Property Handbook: Policy. but its consequences go beyond that aim: since the information on the competitor or his products is incorrect. this is not done by false or deceptive statements about one’s own product. in the most serious cases. however. Like misleading. But even without such an express prohibition. his products or his services.” Some countries have gone even further by implementing a general reversal of the burden of proof or by placing the advertiser under the obligation to “reasonably substantiate” all advertising claims. but where the courts have first reduced this requirement to mere knowledge of facts. . or even malicious behavior. Intent. 2.825 Article 10bis(3)2 of the Paris Convention obliges member States to prohibit all “false allegations in the course of trade of such a nature as to discredit the establishment. often under the general criminal code. always involves a direct attack on a particular businessman or a particular category of businessmen. Discrediting Competitors General 2. some exceptions to this rule are made. Unlike misleading. and have later even assumed such knowledge. especially misleading advertising.” A similar provision can be found in most national laws on unfair competition. especially those involving intentional or malicious defamation. therefore. In all countries. Burden of Proof 2. 2. Law and Use can best be seen in France. civil law sanctions (injunctive relief or damages) are preferred. it is the plaintiff (or the public prosecutor or administrative authority) who bears the burden of proof. for example in the food and drug field. but rather by casting untruthful aspersions on a competitor. discrediting tries to entice customers with incorrect information. it is considered one of the “classical” forms of unfair competition. However. an action for damages will only be successful if there is at least negligence. According to general principles of procedural law in most countries. obliges member States to require the advertiser to furnish evidence of the accuracy of factual claims if “such a requirement appears appropriate on the basis of the circumstances of the particular case. however. criminal sanctions are also provided. In the field of misleading. additionally some of those countries have recently granted statutory relief. The EC Directive on Misleading Advertising. or the industrial or commercial activities. of course.823 The question of who has to furnish evidence of the accuracy of a statement or the likelihood of deception can be of paramount importance in misleading advertising cases. for example.824 Discrediting (or disparagement) is usually defined as any false allegation concerning a competitor that is likely to harm his commercial goodwill. it is generally agreed that discrediting is irreconcilable with the notion of “fairness” in competition. is required in cases that can be described as real criminal offenses. restricted to a cease-and-desist action (and possibly to the remedy of publication). the goods.

As in Article 10bis(3)2 of the Paris Convention.Chapter 2 .826 As mentioned above. prices. This can be achieved by references like “a certain enterprise in X” or may even be the result of a special market situation. the goods and the industrial or commercial activities (of a competitor). However.Fields of Intellectual Property Protection 149 Reference to an Individual Competitor 2. Effective protection against discrediting is therefore typically independent of any proof of actual damage or intent. for example if the maker of the statement believes it to be true. the statutory notion of discrediting is broad enough to cover also statements of opinion. The way in which the harm is done should be irrelevant. in others they are considered illegal under the general provisions on protection against unfair competition. the requirement of a competitive relationship has been totally abandoned. These so-called “personal references” which have nothing to do with commercial activities are in some countries expressly forbidden as disparaging. most countries restrict unfair competition law protection against disparagement to cases where there is at least some sort of competitive relationship between the plaintiff and the defendant. It can also be caused by references to an entrepreneur’s personal status. however: easy identification by the addressee of the statement is sufficient.827 Frequently. In some countries. In some countries (such as the United States of America). the person attacked will be a competitor. qualifications and so on. namely. the concept still has proved to be too narrow. employees. Article 10bis(3)2 of the Paris Convention names the establishment. the common law tort of disparagement in theory requires proof of malice and damage. whether protection should be extended to the case of .830 Opinions differ on whether discrediting should be restricted to statements of fact.828 As to the subject matter of the attack. his race. Statements of Fact 2. Although the courts in the United States of America have gradually eased that requirement. In still other countries. it has at least been recognized by the courts that such statements are within the scope of the general provision against dishonest trade practices.831 The question whether statements of opinion can be discrediting has to be considered in connection with another question. it is in the very nature of discrediting to be directed against a particular businessman or a particular category of businessmen. The Subject Matter of the Attack 2. In other countries. his nationality. for example if there is only one relevant competitor. his religion or his political position. Harm to a business reputation can be caused by all forms of reference to the enterprise or to its goods. any kind of disparaging remark that is likely to harm the goodwill of an entrepreneur should be forbidden. disparagement is concerned mainly with statements of fact. False Statements 2. for example. and this has led to a considerably broader concept of discrediting: not only competitors but also consumer associations or the media can be held liable under unfair competition law if they make derogatory statements about an individual businessman. 2.829 References to a competitor that affect his commercial goodwill can be made in good faith. and that has led to the enactment of legislative provisions for the grant of statutory relief against disparagement without any evidence of damage or intent (see Section 43(a) of the Lanham Act). however. Intent or Actual Damage 2. however. In some countries. credit rating. The target need not necessarily be named.

Some countries have special provisions for the protection of trade secrets either under specific legislation on unfair competition or as part of another law. Law and Use accurate statements. 2. or at least a violation of the general provisions on honest trade practices. it will normally constitute an act of unfair competition as well.834 Trade secrets are protected against unauthorized use and disclosure by various statutory means. as well as malicious or fraudulent intent. administrative. 2. In other countries. but nevertheless discrediting remarks are either directly within the scope of the express prohibition of discrediting. In the United States of America. the attitude is exactly the opposite: it is assumed that. may lack the novelty or inventive step required to make them patentable. Many countries go further. Other countries treat trade secrets as an aspect of tort law. while a patent application is pending. On the other hand. Article 10bis(3)2 of the Paris Convention speaks of false allegations. while providing a valuable commercial advantage for a particular trader. Furthermore.150 WIPO Intellectual Property Handbook: Policy. for example. true but nevertheless disparaging statements are neither within the scope of the common law tort of disparagement nor within that of the statutory relief granted by Section 43(a) of the Lanham Act or—at State level—the statutes on business practices. the plaintiff usually also bears the burden of proof as to the falseness of the statement—which can sometimes make an action impossible. recognizing that true. Still other countries have enacted criminal. or if the words used are needlessly injurious. to which. in principle. such techniques and know-how are not always protectable by patent law. as long as the information has not been disclosed to the public. commercial or civil law provisions prohibiting the unauthorized use or disclosure of business secrets. the owner of the information to be patented ought to be protected against any wrongful disclosure of the information by others. However. some technical discoveries or information. that they must be widely tolerated and that a line should only be drawn where the attack is based on false facts. especially those that have not developed a comprehensive system of protection against unfair competition. much stricter rules apply than to defamatory statements outside the bounds of competition. Although the Paris Convention does not mention trade secrets as such. in the interest of competition. attacks on individual competitors are unavoidable. a literally truthful remark about a competitor may be considered unfair competition if the “attack” is blown up out of proportion.832 An explanation of this difference in attitudes can be found in the diverging assessment of “commercial honor. where constitutional considerations such as freedom of speech have to be taken into account. Firstly. patents are available only for inventions in the field of technology and not for innovative achievements concerning the conduct of business. since employees. the need for protection against wrongful disclosure of “undisclosed information” (another term for trade secrets) is generally recognized. independent contractors and joint venturers are often .” Where unfair competition law has its roots in the protection of the commercial reputation of the individual businessman—as it does in the continental European countries—a “special tort of business disparagement” has emerged. Violation of Trade Secrets General 2. Moreover.833 Competitive strength usually depends on innovative techniques and accompanying know-how in the industrial and/or commercial field. In those countries. The criminal provisions are less important in practice. regardless of whether or not the application eventually leads to the grant of a patent. since normally knowledge of the secrecy. Article 10bis on unfair competition requires protection against any act of competition contrary to honest practices in industrial or commercial matters. however. etc. some countries expressly restrict the notion of discrediting to inaccurate or at least misleading statements. Yet if the disclosure of a trade secret constitutes a criminal offense. Furthermore. however. Thus. consultants. have to be proved.

Chapter 2 . Finally. specific measures to maintain the secrecy of the particular information are also required. it is not unusual to have combinations of the above means available. several countries (following the example of France) differentiate between manufacturing (or industrial) secrets and commercial secrets. Therefore. Usually. only civil tort law might be applicable. In some countries (for example. The first category of trade secrets is related to information of purely technical character. generally.Fields of Intellectual Property Protection 151 privy to trade secrets. that is. violation of trade secrets could result in unfair competition or tort liability. the trader must have shown the intention to have the information treated as a secret. a trade secret is defined as any information relating to a production method. several aspects of civil law concerning employment contracts and general contract law are also relevant. advertising strategies and lists of suppliers or clients. is not required for the secret to be protectable. 2. the use or disclosure of a trade secret by a person who has acquired it in a legitimate business transaction and without any negligence is not deemed unfair. For example. and the final determination of what information can be a trade secret will depend on the specific circumstances of each individual case. For example. the amount of effort and money expended by the trader in developing the secret information. business schedules. distribution methods. absolute secrecy is not a requirement. business partners can be informed without loss of secrecy if it is obvious that the information has to remain secret. in order to qualify as a trade secret. in situations where non-competitors have intimidated or influenced agents or employees. chemical formulae. Also.836 There are several lines of inquiry that serve to determine what information constitutes a trade secret: the extent to which the information is known to the public or within a particular trade or industry. the efforts made by the owner of the information to keep it secret are considered by courts to be of primary importance in determining whether the information constitutes a trade secret at all.837 From an objective point of view. For example. in the Unfair Competition Prevention Act of Japan. blueprints or prototypes. a sales method or any other information on technology or business that is unknown to the public.835 Although a legal definition of a trade secret rarely exists. Factors that indicate whether the information has the necessary degree of confidentiality to constitute a protectable trade secret are whether it contains material that is not confidential if looked at in . On the other hand. What Information can be a Trade Secret? 2. external publications or other information that is readily available will not be considered secret. details of price agreements. the trader involved must have a considerable interest in keeping certain information as a trade secret. Although contractual obligations are not necessary. the information must. the value of that information to the trader and to his competitors. Frequently. On the other hand. Even patent applications may be regarded as trade secrets as long as they are not published by the patent office. for the information might also be discovered independently by others. as well as in criminal sanctions. 2. Commercial secrets include sales methods. the subject matter of trade secrets is rather broadly defined. From a subjective point of view. the United States of America and Japan). like production methods. depending on the circumstances of the case. be known to a limited group of persons only. or have otherwise induced them or other persons bound to secrecy to disclose the secret information. Such information could constitute a patentable invention but. A similar definition is contained in the Uniform Trade Secrets Act of the United States of America. The fact that the information has been supplied confidentially will not always be sufficient. it must not be generally known to experts or to competitors in the field. which could have consequences for the applicability of criminal law. in particular novelty in a patent law sense. contract forms. patentability of the information in question. the extent of measures taken by the trader to guard the secrecy of the information and the ease or difficulty with which the information could be properly acquired by others. consumer profiles.

but have merely taken advantage of the breach of contract of a former employee or partner of the competitor. could create relevant duties in employment relations: for example. must not be so restrictive of the professional abilities of the employee in the future that they constitute an undue restraint of trade. to act with good faith towards his employer and. knowledge and experience legitimately acquired during employment and the prohibition on the use or disclosure of the former employer’s industrial or commercial secrets is often difficult to make. after the employment has come to an end. whether it has necessarily to be acquired by employees if they are to work efficiently and whether it is restricted to senior management or is also known at the junior level. Still. However. Use and Disclosure by Competitors 2. If the former employee can be regarded as a competitor of the former employer. the most solid proof is the strict confidentiality of the information and the contractual duty to keep it secret.839 Frequently. an employee does have the duty. Criminal law. embezzlement. Such provisions may be very important in situations where the employee is not bound by contractual clauses. a willful breach of confidence will be presumed. not to use or disclose any confidential information about his employer’s affairs that may have come to his notice during his employment. in cases where the behavior of the employee is equivalent to theft. employment contracts incorporate specific provisions prohibiting the disclosure of business or trade secrets. there can also be wrongful misuse of confidential information if special knowledge of the employer’s activities in relation to clients’ affairs is made use of to persuade those clients to transfer their business to another. or did not negligently disregard the dishonesty of such means. it is expressly stated in the Unfair Competition Prevention Law of Japan that the rules concerning the protection of trade secrets will not apply where a trade secret is obtained in the course of a legitimate trade activity. Thus competitors who have not used any influence to bring about the disclosure of the secret information. the distinction between using the skills. the determination of the unfairness of competitors who use or disclose the trade secrets of others is based on the means of acquiring the information. employment contracts may serve to reinforce and supplement the protection afforded to trade secrets under the law of unfair competition or tort law. industrial espionage or conspiracy with a competitor. during the period of employment. particularly if the employee misuses lists of customers or internal business details in order to make better offers. It is generally accepted that employees have a basic right to use and exploit. even with the help of trade secrets. as trade secrets themselves are not fully equivalent to exclusive rights under industrial property law. Use and Disclosure by (Former) Employees 2. the inducement of customers of the former employer to become clients of the employee in his new position will probably be deemed unfair. all skills.840 Competitors are usually very interested in acquiring the trade secrets of others. it can prohibit disclosure of secret information by employees. Yet. or where the use of such information by former employees is not related to a competitive action. provided that the person obtaining the secret did not use dishonest means to do so.838 Even in countries where specific provisions on wrongful or unfair disclosure apply. However. a breach of confidence by the former employee will normally be an act of unfair competition. as well as civil and labor law. The competitor’s awareness that the disclosure of the trade secret by the former employee or partner would be a breach of contract is regarded as a minimum level of intent for determining . For example. for example if he has set up a company on his own in the same sector. but such provisions. will seldom be held liable. for the purpose of earning their living. In some cases the use or disclosure of information will constitute a breach of the employment contract by the (former) employee if the information in question must remain secret. For example. Law and Use isolation.152 WIPO Intellectual Property Handbook: Policy. However. like undertakings not to compete. Clearly. experience and knowledge that they may have acquired in the course of previous periods of employment. 2.

competitors are not allowed to interfere recklessly with the contractual relations of others. As the scope of protection may depend on the degree of distinctiveness. products or other marketable creations.844 When assessing the availability of protection against unfair competition for market achievements of others in the absence of confusion. As a minimum prerequisite. at least for a certain period of time. under that specific legislation (principle of “preemption”). acts that cause confusion or mislead normally imply free riding on another person’s achievements. makes it an offense to use a trade secret which has been disclosed by a third party where the person to whom the secret was disclosed knew that the third party was not authorized to disclose the secret. free riding is the broadest form of competition by imitation. but are generally recognized as forms of free riding that are always unfair. but also from the risk of damage to the reputation of the existing business.841 In addition to the likelihood of confusion.Fields of Intellectual Property Protection 153 liability.Chapter 2 . traders and suppliers. protection under unfair competition law will be denied if the achievement that has been copied or appropriated is covered by specific industrial property legislation and the type of protection sought by resorting to unfair competition law could have been obtained. The Mexican law. trademarks and so on. In that sense. industrial designs. The unfairness of the competitive act is regarded as resulting not only from the obvious exploitation of the notoriety of the indication. commercial success of the product or technical achievement of the competitor without any proper effort being made to depart substantially from the characteristic features of that particular achievement. it has often been stated that the mere exploitation of another’s achievement is consistent with the principles of a free market system. 2. for example. For example. if a competitor has bribed or otherwise unlawfully persuaded a (former) employee to disclose a competitor’s trade secret. As a certain balance of interests on the relevant market has been achieved by adopting specific legislation on patents. . Under the principles of a free market. the indication or the product must have a certain distinctiveness (which may be of a level not sufficient for protection under specific legislation). there are other circumstances that may be held relevant under various doctrines with respect to the imitation of indications. the notion of “free riding” has a number of common features with the notions of causing confusion and misleading. 2. As a general rule. On the other hand. Frequently such achievements concern a certain indication or product but they could also be of purely technical character. Taking Undue Advantage of Another’s Achievement (“Free Riding”) General 2. the exploitation or “appropriation” of another person’s achievements is unfair only under specific circumstances. In any case. however. another person’s achievement recognized by consumers and other market participants like dealers.843 From a purely systematic point of view. 2. or free riding on.842 Protection in such cases depends on a number of requirements which vary from country to country. he will be liable for unfair competition. that balance must also be taken into consideration in the application of unfair competition law. Thus protection under the rules concerning unfair competition cannot simply be regarded as an alternative route to the securing of protection which would be available without the obligation to comply with the various requirements of protection imposed by specific industrial property legislation. completely banal indications or products will not usually qualify for protection against mere imitation. Such circumstances involve the act of taking undue advantage of. Free riding on another person’s market achievements can be defined as any act that a competitor or another market participant undertakes with the intention of directly exploiting another person’s industrial or commercial achievement for his own business purposes without substantially departing from the original achievement.

marks that have acquired a certain renown are given additional protection against the so-called dilution of their distinctive quality or advertising value. signs or product shapes that are protectable under those laws.846 Generally. the required degree may still vary considerably from country to country. or if the protection granted by the special law is not broad enough to give the relief sought in the specific case. The definition of those circumstances is often possible only under some sort of “catch-all” provision. it will have a better chance of reaching the required degree of renown than if it is one for mass-consumption goods. Still. Countries have different . The required degree of renown of the mark involved is determined by the relevant public or consumer groups. where the unauthorized use of a mark for different goods or services is not likely to cause confusion.” These are dealt with in the following paragraphs. Exploitation of Another’s Reputation 2. might still be considered unfair appropriation of a reputation. This doctrine has been particularly relevant in the appropriation of well-known indications. Some industrial property laws expressly provide that protection under unfair competition provisions may be invoked for achievements that are not protectable under the specific law. Even legislative commentaries do not comprehensively clarify that question. slavish imitation and so-called “parasitic acts. however. This follows from the “speciality principle” in trademark law. but in such a case the appearance must be recognized as indicating a certain degree of quality. misappropriation of a reputation. protection as such may be invoked if the subject matter of specific legislation does not cover the achievement involved.847 Another type of misappropriation that has been recognized in recent years as being contrary to honest business practice is that of unfairly taking advantage of the reputation or “prestige” of the market achievements of other industrial or commercial enterprises. for example. The concept of “dilution” is understood as the watering down or gradual lessening of the ability of a mark to be immediately associated by consumers or the general public with a particular source.154 WIPO Intellectual Property Handbook: Policy. The likelihood of substantial damage to the proprietor of the mark is assumed from the fact that the mark may lose its established association with certain products. it is not always clear what interests the legislation has in fact balanced by adopting the special law. its unauthorized use for other goods or services. The doctrine may equally apply to product appearances. Law and Use 2. if the law is not applicable to achievements made before a certain date.845 As indicated above. while not causing confusion as to their source. the main rationale behind the notion of dilution is that marks that have acquired a certain renown should be protected against the obvious desire of other market participants to take advantage of the essential “uniqueness” of a mark. and thus usually is established by case law. such as Canada. In some countries. which is a consequence of the distinguishing function of trademarks and service marks. there is neither trademark or service mark infringement nor an act of unfair competition. As some dilution can be regarded as being an inherent result of the use of identical or similar marks for totally different goods or services. If it is a trademark for goods that appeal only to a selected group of consumers. Thus a common approach to the grant of protection against free riding under unfair competition law is to make such protection available only under specific circumstances. image or prestige. Dilution of the Distinctive Quality or Advertising Value of a Mark 2. For example. the EC member States under the EC Directive to Approximate National Laws on Trade Marks and several States of the United States of America. indications. which must differ in some respects from the circumstances under which protection is granted by the specific legislation. if the quality of the genuinely marked product or service has led consumers to associate the mark with a certain origin or consistency of product quality. However. Some industrial property laws expressly exclude additional protection under unfair competition law for inventions. specific circumstances resulting in an act of unfair competition are already recognized in many countries: dilution of the distinctive quality or advertising value of a mark. For the following types of free riding.

however. For example. to introduce it on the market and to win some success or recognition and the efforts made by the imitator to copy and exploit that achievement for the act to be deemed unfair. “style”. or where there is no likelihood of confusion as to the source of the products. Slavish Imitation 2. 2. the product or other . Alternatively. in some countries the term “suitable for” or other similar terms may be permissible in connection with spare parts and accessories. In this respect. 2. creativeness and expense on the part of the imitator. for which purpose the prestige of the mark is taken into account. is established. the qualifying circumstances may sometimes be combined with the concepts of dilution. in Spain that type of misappropriation is expressly prohibited without any further prerequisites in Article 12 of the Law Against Unfair Competition of 1991. for example as to “sponsorship”. and subsequently producing an improved version of the product or substance.” The latter is generally understood to consist in examining or analyzing. a product or substance in order to understand its structure. 2. nevertheless. The imitated products or indications would still have to possess a particular distinctiveness. in turn.” Frequently. and eventually producing a competing (improved or different but equivalent) product. is based on broader public policy considerations. The practice of reverse engineering is. or again he may use another’s mark with qualifying terms like “model”. despite the fact that alternative ways of competing effectively were available. with the purpose of learning the technology they embody. it is part of the normal exercise of competition in a free market environment which.Chapter 2 . This kind of unfair free riding is usually regarded as an exception to the general rule of free appropriation in the area of products or indications that are not protectable or for which protection has lapsed under specific legislation. nevertheless consciously drawing closely on the characteristic and well-known features of another’s mark. “type”. by taking apart or decomposing. In the absence of likelihood of confusion. and so on. investment. misappropriation of reputation or “parasitic competition. the specific circumstances of the case must reveal some exceptional character for the act to be deemed unfair. he may use the mark in advertising his own trademarked goods with the aim of transferring the image of the well-known mark to his own goods.849 The concept of slavish imitation as a separate act of unfair competition has been developed in several countries of Europe.Fields of Intellectual Property Protection 155 approaches to this kind of misappropriation. however. but noticeably different mark. Apart from that. whereas in France the appropriation of the prestige of another’s mark or product is usually assumed to be unfair. therefore. For example. In fact. which must not merely derive from technical features necessary for the product to function properly. a competitor may use a generally similar.848 Taking advantage of another’s trademark or service mark may occur as a more or less veiled form of appropriation. not in and of itself unfair. that a secondary exploitation of the mark could not reasonably be expected. but must concern aesthetic or decorative features that leave sufficient room for alternative shapes and designs. for the appropriation by a third person to be allowed. Usually the unfairness is seen in the lack of research.851 Acts of slavish imitation should be distinguished from acts of so-called “reverse engineering. In the United States of America there is in principle no objection to appropriation unless a likelihood of confusion. it is not necessary that the market participant be a direct competitor of the proprietor of the mark. who has merely copied the achievement of another.850 Not all prerequisites of slavish imitation are equivalent in all countries. The practice of reverse engineering is commonly practiced in industry in connection with the products of competitors. composition or operation and find out how it was made or constructed. there has to be a marked contrast between the efforts made by the competitor to develop his achievement. In Germany it is required. however. as long as there is a likelihood of damage to the exclusive image or reputation of the mark or the business involved.

where the competitor’s product is usually well-known. the imitator has less reason to claim the fairness of his action. However. that would constitute patent infringement. Comparative advertising may take two forms: a positive reference to another’s product (claiming that one’s own product is as good as the other) or a negative reference (claiming that one’s own product is better than the other).852 Another variety of unfair free riding recognized in some countries is the concept of “parasitic acts. it is the question of disparagement that arises. What tips the balance definitely against the imitator is his systematic and methodical appropriation of the characteristic achievements of one particular competitor in a routine manner. Some countries adopt a flexible approach in these cases. Comparative Advertising Definition 2. For example. and only for a period of time that is much shorter than under specific industrial property legislation. It is to be noted. the United States of America) just copying the product of another person (even if done systematically. In particular. the relevant acts might still be actionable on grounds of unfair competition. who is either mentioned by name or implicitly identifiable as such by the public. Parasitic Acts 2. As a result. taking into account the doctrine of equivalence). by adapting the scope of injunctions and also the time limits of protection to the particular circumstances. Law and Use result obtained through reverse engineering may. Moreover. If a patent is not infringed. but. however. but the manner in which the original product was copied is found to be dishonest or unfair (regardless of whether reverse engineering took place).” This concept has many features in common with the concept of slavish imitation. In the second case.156 WIPO Intellectual Property Handbook: Policy. as soon as the achievement involved is recognized as innovative or strongly appealing to consumers. constitute an infringement of an industrial property right. For example. protection could be restricted to identical imitations. In the first instance. in particular. it must not be misleading or disparaging.853 The different attitudes towards true but nevertheless discrediting statements can best be seen in the examination of comparative advertising.854 It goes without saying that comparative advertising has to respect the restrictions applicable to all advertisements. The General Restrictions: “Misleading” and “Discrediting” Comparisons 2. where the competitor’s product is criticized. the crucial question relates to the possibility of misappropriation of another’s goodwill. both forms of comparison involve an (unauthorized) reference to a competitor. ordering samples from a competitor for the purpose of imitating his products more easily and systematically may be found to be unfair parasitic behavior. the imitation of one product which is not particularly new or original could possibly be allowed. Comparison based on false or misleading statements about one’s own product or involving false statements about the competitor’s product is forbidden in all countries. Here the mere imitation of the achievements of others is still considered inherent in a free market system. For example. circumstances relating to the modus operandi of a competitor may denote unfairness: for example. that in some countries (for example. if a product made after reverse engineering of a competitor’s product falls under the claims of a valid patent (where appropriate. under certain circumstances. but exceptional circumstances may make the imitation unfair. the amortization of the innovation costs could be considered a relevant factor in determining whether or not a particular imitation is fair. . or in respect of one particular competitor) will not be recognized as unfair competition unless there is copying of non-functional features which are distinctive or have acquired secondary meaning.

doctrine and case law have in practice allowed comparisons only under very special circumstances. and that it does not present goods or services as imitations or replicas of goods or services bearing a protected trademark or trade name. etc.) misleading unless they can be proved correct. the legislation of some countries has even expressly forbidden all comparisons that needlessly identify a competitor. however. that there be no risk of confusion. some countries consider statements claiming superiority or uniqueness (like “the best”. price comparisons. for example. The courts of those countries that traditionally view comparative advertising as disparaging have gradually relaxed the strict prohibition on all statements identifying a competitor. comparative advertising is generally tolerated. that the competitor and his product be in no way discredited or denigrated. even if the reference to the competitor or his product is clearly disparaging or exploits his goodwill. comparative advertising is either forbidden or at least severely restricted. or if the comparison is necessary to explain a certain system or new technical developments in general.856 In recent years. or if the overall impression is misleading. Countries that allow comparisons place special emphasis on the fact that even true statements must not be unnecessarily disparaging or that irrelevant facts must not be compared. According to the rule that “the honest businessman has a right not to be spoken of.Fields of Intellectual Property Protection 157 2. even if the truth is spoken”. that the overall impression be not misleading. there seems to be a clear trend towards the admission of truthful comparative advertising. that there are differences in the evaluation of the notion of “misleading” and especially in that of “discrediting. it cannot be denied that comparative advertising can more easily be misleading or disparaging than most other forms of advertising. The same argument has led the courts of other countries to find comparative advertising more or less automatically against honest trade practice (and therefore against the general provision on unfair competition law). relevant and ample material. the courts will not interfere. It has been increasingly recognized that true comparisons of relevant facts can not only reduce the consumer’s information search costs. if they have been expressly required by a customer. if they have been made to counter an illegal attack on the advertiser. In countries with a rather permissive attitude towards true but nevertheless disparaging statements. that the comparison does not take unfair advantage of the reputation of a trademark. for example if the comparison is based on irrelevant (or not really comparable) aspects. this negative attitude towards comparative advertising has changed. For example. however. The Trend Towards Admission of True Comparisons 2. . As long as what is said is true. In countries that traditionally put special emphasis on the protection of the “honest” businessman and his reputation. verifiable and representative characteristics of goods or services meeting the same needs or intended for the same purpose be compared. relevant. These potential dangers require special safeguards against abuse. trade name or other distinguishing marks of a competitor or of the designation of origin of competing products. On the whole. The 1997 EC Directive on Comparative Advertising goes even further by expressly requiring that only material. Special Dangers of Comparative Advertising 2. while others consider them harmless exaggerations.855 It must be remembered. Sometimes the mere fact that a competitor is named against his will is considered discrediting and therefore unfair competition. if based on true. Different assessments of the notions of “discrediting” and “misappropriation” are of even greater importance. may be allowed.857 On the other hand.” As mentioned above. but also have positive effects on the economy by improving market transparency.Chapter 2 . Although it has sometimes been stressed that true comparisons might be in the interest of consumers.

this kind of indirect comparison is basically considered legal. television and other media.859 In countries where trademarks are protected solely as indications of the source of a product or service.860 In many countries product testing is done by consumer organizations and/or private or public institutions like the press. and may the results of their testing be used in advertising? 2. Usually two questions will arise here: are the organizations liable under unfair competition law. denigrate or indicate contempt for a competitor’s marks. Comparisons Made by Third Parties 2. unfair competition law is applicable to these organizations. 2. Apart from the specific categories of acts already discussed which are generally considered unfair competition. and there may be constitutional reasons for such an exception in cases of comparative advertising. However. but also trademark law has to be taken into account. too. and that it does not discredit. either in the form of an express prohibition in the specific law or. more frequently. In other countries. decrees and the like. In some countries that in general do not accept comparative advertising. there is a wide range of acts and practices that may be dealt with under unfair competition law in one country but not necessarily in another. It is to be noted that the following explanations only give examples. it is expressly forbidden for a competitor to refer to tests conducted by consumer organizations. or in specific other laws. service or business. Other Acts of Unfair Competition General 2.858 Comparison is often impossible without reference to a certain mark which refers to a particular product. there are countries where the use of another’s trademark in comparative advertising may be considered trademark infringement. 2. the statutes so far have not been applied in cases of truthful comparative advertising. In other countries. .158 WIPO Intellectual Property Handbook: Policy. There is a case for allowing such advertising provided.861 In those countries that have given up the requirement of a competitive link between plaintiff and defendant. in particular. under the general provisions on unfair competition. unfair competition law particularly reflects the sociological.862 There seems to be no general agreement on the question whether and under what conditions such test results may be used by advertisers. Notwithstanding this. not only unfair competition law. which have an adverse effect on a business reputation. are primarily dealt with under general civil law tort provisions. Law and Use Comparative Advertising and Trademark Law 2. “unfair” product tests. the use of a trademark in comparative advertising may not be within the scope of trademark law. The discussion that follows is therefore restricted to those aspects that most countries appear to consider (although perhaps with different emphasis) contrary to “honest trade practice”. and in still others such references are severely restricted. that it does not cause confusion between the marks of the advertiser and those of a competitor. economic and ethical conceptions of a society. In these cases.863 As mentioned earlier. not an exhaustive list of these other unfair practices.

etc. it may distract consumers from the merits of the principal goods or services and thereby entice them to buy something that is either not worth its price or not really needed. or any discount or other advantage dependent on the purchase of a product. gifts and other inducements.868 A frequent marketing technique to attract new customers consists in the offering of bonuses.866 It is further considered unfair in many countries to abuse the consumer’s superstitions. bonuses. Such sales promotion can be a new and efficient channel of distribution and may thus stimulate competition. Since the very purpose of all marketing or advertising practice is to influence consumers favorably. where the winning of prizes is a matter of pure chance.867 Apart from these special cases. Most of these are therefore regulated in one way or another. an advertisement that exploits elderly people’s fears of ending up in a nursing home. 2. credulity. and in the organization of competitions. are forbidden in principle in some countries.Chapter 2 . the courts of some countries have identified a group of cases under the general clause against unfair competition which can be described as “psychological pressure to purchase” or “exaggerated enticement. many countries tolerate unsolicited home visits (“door-to-door sales”) as long as they do not involve any deception or impose undue psychological pressure on the consumer. 2. Lotteries. moreover. it is difficult to determine what requirements have to be met before a practice is deemed to be “undue” in relation to the consumer. often regulated in specific laws. like the offering of free goods or discounts and lotteries. Most countries. On the other hand. however. This is particularly true of marketing techniques like games. fears or feelings of charity. This is often asserted in cases where the privacy of the consumer has been invaded or where he has been manipulated by means of advertising techniques. because it plays on the fact that many consumers either tend to forget to return the goods or even feel under an obligation to keep them. etc. and otherwise . Lotteries. Exploitation of Fear. On the other hand. Opinions may vary on the question of unsolicited telephone calls: while some countries consider them per se an intrusion into the privacy of the consumer. Consequently. 2. however. The same is true if a special situation in which the consumer is especially vulnerable is exploited for commercial purposes. practices that “unduly” influence the consumer or try to do so may be considered contrary to honesty in competition. if victims of car accidents are pestered with offers of towing services. for example. Gifts. or if the recently bereaved are offered funeral services. little agreement (and little consistency) on the question of what specific practices should be considered unfair competition. There is.865 For example. and sometimes even expressly forbidden.864 Modern competition law aims to protect all those concerned by unfair market practices. Additionally. The same is true of the unsolicited sending of advertising material. most other countries tolerate them as long as the consumer’s lack of experience and his privacy are not exploited. which exploit for advertising purposes a consumer’s predisposition to gambling. or causes unnecessary anxiety over death or health problems can be considered contrary to “honest” trade practice. lotteries or games. 2. For example. 2.” These cases are mainly seen in connection with special marketing practices. For example. they are subject to self-regulation measures. lotteries and other competitions. however. Undue Psychological Pressure. allowed in principle in others and more or less strictly regulated in others.Fields of Intellectual Property Protection 159 Nuisance Advertising. in many countries the delivery of unsolicited goods to a person who is required to pay for them unless he expressly refuses or returns them is considered unfair competition. are generally forbidden if they are linked to the purchase of a product. a certain borderline of influence has to be crossed. Sales Promotion: Bonuses. take special precautions against any abuse of children’s lack of experience. In practice.

or in inducing the personnel or agents of competitors to terminate their employment or agency contracts. provided that no deception is involved and that the consumer is not put under any pressure to buy. there are several acts which may hinder or obstruct a competitor in his business activities. constitute separate unfair acts. as will the systematic enticing away of personnel with a view to damaging one particular competitor. unfair competition law may offer some additional protection. under certain circumstances. or are at least severely restricted. For example. Law and Use are severely restricted. an otherwise accepted marketing practice may well be considered contrary to “honest trade practice. as forms of unfair competition. or the imposition of fixed retail prices are practices that have been designated by the Fair Trade Commission of Japan as being prohibited by the Japanese Anti-Monopoly Act.160 WIPO Intellectual Property Handbook: Policy. agents or employees. In the United Kingdom. which would normally be considered unfair. or inducement to breach a valid undertaking not to compete. in theory. Impediments that are traditionally covered by anti-trust law are discrimination. “predatory pricing” with a view to damaging a competitor may be prohibited under competition law. Merely inducing the clients or employees of competitors to change suppliers or employers by offering better conditions is inherent in free competition and cannot therefore be regarded as unfair. Another example would be the deliberate destruction of bottles destined to be recycled and refilled by a producer of soft drinks in order to lessen his ability to supply the market. In some countries. either directly or indirectly. pay special attention to the actual conditions under which these sales practices take place: if the consumer is put under any psychological or other pressure to buy. boycotting and dumping. like below-cost prices. . but which might also be regarded. the courts of most countries. sales at unreasonably low prices. will be deemed unfair. As indicated earlier. whereas sweepstakes are often considered legal. at least if the acts are perpetrated on an individual scale.871 Other such unfair practices consist in enticing away from competitors. Contests in which the outcome can be influenced to a certain extent by the participant’s own skill are generally viewed more favorably. unreasonable interference with the business activities of competitors. means such as bribery or deception of clients. selling below cost or at an “exceptionally low profit margin” is expressly prohibited under unfair competition law. “pyramid” (“snowball”) sales and other such methods are often considered potentially misleading and consequently forbidden (sometimes even on pain of criminal sanctions). Other (indirect) impediments are often controlled by anti-trust law but. An example of a direct obstruction would be the actual obstruction of trading on a particular market location. even those that allow the sales promotion techniques mentioned above.” Impeding of Market Activities 2.870 Finally.869 On the whole. However. these acts of unfair competition are frequently accompanied by the violation of trade secrets but may. On the other hand. if the prizes are extremely valuable and so all the more enticing. 2. nevertheless. the United States of America and other countries. 2. but that does not preclude the application of unfair competition law.

Chapter 3 The Role of Intellectual Property in Development and WIPO’s Development Cooperation Program Objectives of Developing Countries Industrial Property and Development Industrial Property Protection and Development Inventions. Technology and Development The Promotion of Innovation Introduction A Global Approach to Establishing Innovation and Invention Support Structures or Services Implementing and Managing Innovation and Invention Support Structures and Services Innovation Center or Innovation Support Network Licensing and the Transfer of Technology Introduction The Commercial Transfer and Acquisition of Technology Negotiation of Licensing Agreements Remuneration Types of Intellectual Property Licenses Government Control of Licensing Agreements Copyright and Development The Development Cooperation Program of WIPO Introduction Objectives Development Cooperation in Relation to Intellectual Property The WIPO Worldwide Academy .

162 WIPO Intellectual Property Handbook: Policy. Law and Use .

The numerous challenges of the new century call for new approaches. notably in the worldwide spread of the use of the Internet. which has seen momentous breakthroughs in genetic engineering.5 The framework of international legislative and administrative assistance to developing countries has been strengthened by the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) administered by the World Trade Organization (WTO) in cooperation with WIPO. The Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) and WIPO-WTO Cooperation): WIPO’s program of assistance and support to the LDCs in particular has been intensified to help them meet this deadline. and commercial policies to promote a better balance of exports between raw materials. 3. regional and international levels to enable developing countries to participate in and benefit from technological advances. giving rise to questions that are not only biological and technical. but also human and ethical. social and cultural development worldwide. and to develop the human resources which operate intellectual property systems. WIPO now maintains constant and increasing contact not only with policymakers at the governmental level in the ministries immediately concerned. The last to be so obliged will be the least developed countries (LDCs) which have until January 1. but other developing countries continue also to be so assisted.and large-scale industries in priority sectors. 2006 (see chapter 5. Developing countries which are member States of WTO were given different periods of time to adapt their intellectual property systems before being obliged to apply the TRIPS Agreement. 3. The use of traditional knowledge and genetic resources is also evolving in ways that particularly affect developing countries: it should bring rewards to the societies that produce it as well as to the users. One such challenge is in information technology. Industrial policies continue to emphasize the establishment of small-. and finished.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 163 Objectives of Developing Countries 3. creative crafts and folklore. 3. and with national intellectual property . but these new challenges emphasize all the more how globally interlinked national and regional intellectual property systems have become. with concerted action at the national. arising from traditional knowledge and indigenous arts. and all the issues it raises in copyright and related rights.4 Intellectual property in itself has always been an integral part of general economic. At the same time there is a continuing drive to obtain maximum economic benefits for developing countries from their enormous resources in indigenous creation.Chapter 3. which tend to predominate. however. 3.3 Recently. 3.1 The general long-term objective of developing countries remains the establishment of a sound development base. This includes progress towards agricultural self-sufficiency and the stimulation of commercial and industrial activity. there has been an evolution of the conditions in which these development aims are pursued. Another challenge is in the field of biotechnology. as well as in fair practice in industrial property. WIPO has broadened its contacts and partnerships with all levels of society.6 In keeping with the more integrated approach to intellectual property as a key feature permeating society. manufactured products as well as services. medium. most urgently in the use made of domain names. as do the efforts to improve infrastructures. Fresh approaches to meet the challenges have become correspondingly global.2 The aim of developing countries to adopt policies on science and technology that facilitate their acquisition and use on appropriate terms remains present and important. whether legislative or administrative.

the grant of a patent encourages investment in the industrial application of the invention.8 Countries have laws to protect industrial property for two main reasons. as well as with the general public to promote awareness of the wider issues and interests involved. within the government and in the private sector. and is being used by an ever increasing number of developing countries. 3. Many developing countries are aware that it is in their best interest to establish national industrial property systems where they do not exist. these innovations become the spearhead of some of the most advanced technology. etc. with non-governmental organizations concerned. as a deliberate act of government policy. apparatus. to penetrate new markets with a minimum of risk. but also with other interested ministries. of industrial property. however well its basic laws are drafted and however efficiently they are implemented. and to encourage fair trading: this contributes to economic and social development.7 Industrial property has long been recognized and used by industrialized countries. 3. In a practical sense. An industrial property system is established to serve the needs of traders. public health and preservation of the environment. researchers.10 For example. the right to obtain a patent for an invention encourages the investment of money and effort in research and development. inherited from their historical past. and to amortize the investments made in the research that led to the innovations in the first place. This is becoming more and more apparent in a modern world increasingly dominated by technology.12 An essential task is to promote. and of how its main components can be developed . 3.) to establish themselves more readily. and to strengthen and upgrade existing systems which.9 Industrial property rights make it possible for the creators of innovations (goods. businessmen and consumers. Awareness of the Industrial Property System 3. as an important tool of technological and economic development. One is to give statutory expression to the moral and economic rights of creators in their creations. can make an effective contribution to economic and technological development unless the system is known to. those for whose benefit it was established. with civil society interest groups involved in such questions as farming. processes. and the other is to promote. manufacturers. and used by. 3. Industrial Property and Development Industrial Property Protection and Development Introduction 3. Law and Use offices. creativity and the dissemination and application of its results. as well as among potential owners and users.164 WIPO Intellectual Property Handbook: Policy. awareness of the nature of industrial property. among owners and users. with business communities at different stages of development. industrialists. related to each other.11 No industrial property system. are no longer adequately responding to new needs and priorities. and the benefits to be derived from an effective use of industrial property cut across sectoral lines within an economy. with the creators of intellectual property. The list of potential users and beneficiaries is inexhaustible.

” that is. Patent literature will often discuss disadvantages and difficulties that can be avoided by using a particular process or design or will discuss advantages or benefits of a particular process or design. The awareness of the usefulness of the patent system for technological development purposes and the existence of an adequate industrial property system providing patent information services are essential elements. Patents and Patent Information 3.Chapter 3. 3. it acts as an inspiration or catalyst for further inventions. it is necessary that the development objectives of the country concerned be reflected in the patent system of that country. In other words.15 The utilization of information available through this disclosure avoids wasteful duplication of effort and the multiplication of costs that research aimed at finding solutions to technical problems can entail. at the latest when the patent for invention is granted. Such .18 In this connection. It also creates a favorable climate for the transfer of technology by means of the security it provides for the patentee. In this respect it is essential that the patent system. be able to carry out the invention. the invention will be “disclosed. by providing recognition and material benefits to the inventor. 3. It may be mentioned that in many instances the inadequate utilization of the patent system in developing countries is merely a consequence of the lack of appropriate cooperation between the patent administration and the other relevant governmental bodies. The existence of appropriate links with the various related sectors could ensure the effective contribution of the patent system (patent laws and patent administration) to the development process. the administration entrusted with patent matters must have the required capabilities and the mandate for undertaking and achieving the tasks and results provided for in the patent legislation.14 Patent laws require that an application for a patent for invention describe the invention with such clarity and completeness of all the technical details that anyone having ordinary skill in the art should. and this contributes to the advance of science and technology. Equally essential is the need to coordinate the said system and its patent information services with other branches of the government administration related to aspects of technology transfer and technological development.17 These advantages that may be derived from the information aspect of the patent system can be gained if such use is adequately incorporated in the administrative infrastructure of the countries concerned. 3. and that granted patents for invention be published. by merely reading the description. 3.19 One of the main advantages of a patent system is the encouragement of indigenous inventiveness and the stimulation of creativity among the peoples of the country. and the patent information aspect of it.13 An equitable and modernized patent system.16 A state of the art search through patent documents will usually identify those solutions to a technical problem that have been proposed in the past. be adequately understood and accepted as a necessary component of the development efforts of the government. In particular. its essence and mode of exploitation will be brought to the knowledge of anyone who wishes to know. constitutes an incentive for inventiveness and innovative activity. Utility Models 3. 3.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 165 and successfully exploited in commerce and industry to enable the industrial property system to serve better the national interest and national goals of development.

an effective system of protection stimulates creative activity.24 One of the most widely used measures of economic progress (whether for a country or for an individual enterprise) is productivity. may be said to depend essentially on its capacity to keep pace with development and progress. 3.166 WIPO Intellectual Property Handbook: Policy. Creativity of this kind nevertheless deserves reward and should be encouraged. that it facilitates economic growth. Trademarks 3. of course. If less inputs are required to produce the same amount of output. 3. Any company unwilling to compete in the modern marketplace is therefore bound to become vulnerable to challenges from national or international competitors in what it might have once thought was its own backyard. the survival of any enterprise. or even nation. based on the trademark. inter alia. These creations usually fall within the ambit of the term “industrial designs. . indeed the very survival.e. 3. The capacity to put these features to productive use continues to be of fundamental importance within the social and economic structures of human society. undoubtedly. depends essentially on their ability to progress.21 A well-selected trademark is an asset (in some cases.23 Inventiveness and creativity are features which have favored the differentiation of mankind in the course of evolution from all other living species. not only in the national context but also internationally. Thus the effective protection of trademarks is an important aspect of commercial activity in any given country.26 One of the important elements in the sound management of a science and technology policy based. and goodwill in the marketplace.” By providing recognition and material benefits for the creator of an industrial design. output per unit of input. however. the resources which are liberated by the use of a more efficient process may be put to other productive uses. competitors are constantly launching new products and/or processes on a market which is in a perpetual state of change. the most important asset) of substantial economic importance to an enterprise because it enables that enterprise to establish a market position. Law and Use encouragement and stimulation could result in a large number of inventive products some of which might not. i. The protection of utility models serves this purpose by providing for a type of industrial property with less stringent requirements and a relatively short duration in comparison with a patent. organization. of any company. 3. An efficient patent system contributes to the stimulation of innovation in three main ways. on encouraging invention and innovation is.20 Many developing countries are extremely rich in traditional art and folklore which stimulates creations of local craftsmanship. As a result of the ever-growing pace of technological development. meet all the requirements for patentable inventions. the patent system. Industrial Designs 3. Indeed.22 The growth. Technology and Development 3. thus allowing overall expansion of output and economic growth to occur. improvement and renewal.25 The principal significance of improved productivity is. Inventions.

31 Certain countries have established special systems or structures to assist individual inventors.Chapter 3.). exploitation and to . Their administration must be effective and not over-expensive. The patent system thereby contributes to the evolution of the technological base of industry. the payment of the various kinds of fee. Government Support for Inventive Activity 3. with the possibility of obtaining the exclusive right to work an invention for a limited period of time.” 3. the limited period of time during which the holder of a patent is entitled to prevent others from using his invention creates an environment which facilitates the efficient development and utilization of patented inventions. commercially polished. including interest-free or low interest loans. The inventor will be at ease to further develop the invention into a final. etc. product or process that could be marketed and produce a benefit. grants for development of certain inventions and innovations. 3. in order to avoid unnecessary obstacles between an inventor and his legal rights. It thus creates conditions in which risk capital can be safely advanced for the transformation of an invention into an innovation.33 In an increasing number of countries. special loans or subsidies. In return for the grant of a patent. for commercial use) by all during the term of the patent grant. free consultancy services. Thus the information contained in a patent is available for research and experimental purposes (although not. In other words it contributes to the dissemination of new knowledge since the right of the inventor to prevent others from using his invention for a limited period is not granted freely. the patent system provides the framework for the collection. 3.30 The responsibilities of governments towards their inventors do not end with laws and treaties securing substantive protection of inventions. On the expiration of the patent term the information falls into the public domain and is freely available for full commercial use by all.29 Third.27 First. It protects the inventor against uncontrolled competition from those who have not taken the initial financial risk.28 Second. classification and dissemination of the richest store of technological information existing in the world today. possibilities for concluding governmentally or publicly financed “research contracts. constitutes an important incentive to inventive and innovative activity. of course. 3.32 Some provisions contained in financial or tax laws creating favorable conditions for inventors and inventive activity could be summarized as follows: reduced taxes in respect of income stemming from licensed patents and know-how. specialized governmental institutions have been created to encourage inventive activity and also to promote the development. small enterprises and non-profit-making organizations in obtaining protection for their inventions and their effective management (for example. 3.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 167 3. the inventor must disclose the details of his invention to society. reduced fees for acquisition and maintenance of industrial property rights by individual inventors. the existence of the patent system.

government agencies — including in some cases the industrial property administrations — organize or participate in the organization of such promotion activities. several countries organize special exhibitions and contests for inventions made by schoolchildren. and their wishes will be better satisfied.37 However important government support to inventors may be. cannot be realized without innovation at all levels. it is necessary for the inventors themselves to realize better that they need to act collectively. With a view to creating better opportunities for development of those talents as early as possible.38 At the international level the cooperation between organizations of inventors is either bilateral or in the framework of international organizations of inventors. Rewards and Recognition for Inventors 3. to promote applied worked-oriented research. by providing the inventor with the relevant support. 3.34 For instance. if they are active in those associations and if their associations maintain closer relations with each other on the regional or international level.35 An important means of action by governments for promoting inventive activity is the direct encouragement of inventors by public recognition. Non-material rewards (medals. worldwide economic development. innovation means effective policies to attract foreign investment. to create an . students and young people.168 WIPO Intellectual Property Handbook: Policy. 3. 3. Law and Use some extent the commercialization of local inventions. in some countries individual inventors may get assistance and their inventions may be tested in government-owned or government-financed research and test laboratories and institutions. and the African Federation of Inventors’ Associations (AFIA).36 Education is an important factor in that process. In some countries such moral awards and celebrations have been established by governmental acts. Another important support to inventors are exhibitions of inventions in that they highlight the inventions and facilitate the establishment of contacts with industry. In several countries. a global organization. Cooperation Among Inventors 3. At the governmental level. a regional organization. The Promotion of Innovation Introduction 3. Examples of international organizations of inventors are the International Federation of Inventors’ Associations (IFIA). with the creation of employment. They will be better heard.39 At the beginning of our new millennium. diplomas) and sometimes financial rewards are granted not only to meritorious inventors. if they form associations. but also to potential inventors in the framework of youth science and invention contests. In many countries the promotion and encouragement of inventive activity among young people enjoys increasing attention. Usually it is done on a non-profit-making basis and in some cases repayment of the expenses is required if the invention has been successful on the market. economic growth and the reinforcement of the industrial network.

46 Technology transfer does not only consist of the transfer of intellectual property rights: the signing of license agreements. the scientific and entrepreneurial culture.and medium-sized enterprises (SMEs) and other creators in their efforts to innovate. the technological and manufacturing infrastructure. 3. financial institutions. fiscal and general financial systems. including the transfer of technology.43 Innovation is often influenced by the environment in which innovators work. payment of royalties and transfer of intellectual property are only a . Consequently. Furthermore. but should become a major force behind the innovations which promote economic growth. A recent study found that 20% of existing international trade relies on new patents. multinational bodies and the results of national or international research and development programs that produce innovation or innovative products. the establishment of support services or a structure for invention and innovation should be considered as a governmental priority.Chapter 3. 3. the necessary funding to develop innovation or inventions into marketable products is rare and naturally more problematic in developing countries. 3. to a marketable product or innovation is often difficult. the legal. both nationally and internationally. With the increasing complexity of market relations in the globalization of international trade and commerce. human resources and their level of knowledge and education. Factors that generate a favorable overall environment for inventions and innovation are: the state of science and technology.40 In fact. 3.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 169 innovation and entrepreneurial culture. the competitiveness of industries can only be maintained by continuous innovation. inventions and innovations are considered high-risk investment and do not obtain financial support easily. A Global Approach to Establishing Innovation and Invention Support Structures or Services 3. in many cases. governmental offices and industry networks among others. 3. Also. SMEs and private research activities not only contribute. innovation is one of the key factors of the creation of new industries and the revitalization of existing ones.44 Specific factors that influence innovation are the relationships between universities. Unfortunately. in both developed and developing countries. national innovation support structures and programs for services should be seen as a unified whole. support structures and services to facilitate the transfer of technology or knowledge from creators to industry are of increasing importance.42 The progress from an idea or initial research. 3.45 Since these factors can be influenced by national policies. the administrative and financial regulations governing the creation of new companies play an important role.41 It is not only large. with the main objective of increasing the capacity of society to generate inventions and innovations. to facilitate the integration of new technologies and to support small. In a globalizing economy. long and costly.

industries and those who . It would be an organization for the development of new techniques and products and the valorization of intellectual property rights. and considering funding to support the development phase. with the flexibility and adaptation capacity of an independent organism. 3. entrepreneurs and SMEs. which can be attained only if all the economic players of a country participate in such a policy. processes and technologies. for example. investors.47 However. which could in some cases last several years. and even personal relationships among technologists. 3. Innovation Center or Innovation Support Network 3. a board of governors or an executive committee.52 This plan would have to be approved by all parties concerned. The first members of the organization should be drawn from the local authorities and interested private business. 3. between researchers.48 Promoting innovation is a national policy objective. with planning and policies depending on the circumstances prevailing in each country. regional and international markets. The persons involved would have to prepare a technology development action plan based on evaluation of the weaknesses and strengths of the local realities.51 This organism would have the mission of advising the national authorities on the global environmental factors and the changes needed to set up innovation support structures. innovators and SMEs investing their ideas and transforming them into products. however difficult to evaluate. meetings. make an important contribution. Law and Use part of it. research centers and universities and. 3. and could later be assigned to monitoring and providing budgetary and general oversight control of the program.49 Innovation and invention support structures and services have to develop their own type of management. managing an innovation support structure needs the creation of an efficient and autonomous organism approved by the national authority.170 WIPO Intellectual Property Handbook: Policy. on the other side. individual inventors. whose operations should be accountable to public authorities (for example. 3.50 It could be an organization. and notably innovation centers able to bridge the gap between creators and the market. Implementing and Managing Innovation and Invention Support Structures and Services 3. health care or education. However. composed of representatives of all stakeholders). generally speaking. SMEs. and furthermore other factors. as are other public services on offer. which ultimately benefit society as a whole. an evaluation of the prevailing environmental factors influencing innovation in a given country will be the first step to take to determine the innovation and invention structures and services that can be implemented there to increase its competitiveness in local. Unpatented know-how. ideas and suggestions often constitute information of considerable use.53 An important element of these innovation structures is an organism — or a network of entities — which acts as the missing link on the one side. innovation support structures should be considered a public service for innovative minds. such as conferences. This public service should give incentives to and reinforce inventors. The promotion of a combination of all these modes of transfer assists all forms of creativity. WIPO and/or other international partners could provide advisory assistance. Therefore.

on the evaluation and assessment of innovation and on the management of intellectual property rights. the technical research and development and prototypes. assistance in creating smaller offshoots (spin-offs) of large organizations or companies. 3. particularly in countries where the industrial structure does not always have the capacity to integrate innovations with a high content of knowledge. a seminar and workshop program to generate knowledge in the community.Chapter 3. which provides expert opinions on the strengths and the weaknesses of an invention regarding its novelty. a business assistance program to take the chosen projects through all stages of their development.int/icdir may be consulted.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 171 finally will bring the new products or services to the market. including initial screening of submitted ideas or inventions to determine acceptability for evaluation. which could produce operational models for demonstration purposes or organize pilot (test) production.54 To realize that mission. They do not always realize their potential as a major influence in the global economic context.56 WIPO has established an online reference service that provides information on the activities of and services offered by innovation centers worldwide. technical feasibility and market potential. in addition to administrative services. including the market study. These functions. research and development. as examiners and attorneys only. in which they can promote a national strategy to protect and valorize knowledge. other creators and businesses to bring innovatory projects to completion. counselling to SMEs on the preproduction process. prototyping services.wipo. SMEs. and notably on managing intellectual property rights. the intellectual property management and the filing of applications for protection of rights. entrepreneurs or anyone seeking adequate information on the necessary steps that have to be taken to realize innovation or invention projects. in cooperation with experts such as patent attorneys and intellectual property public relations officers. and help to individual creators to find industrial or other partners to commercialize their invention or innovation. researchers. 3. a brokering program of activities designed to acquire financial support for the development and the commercialization of selected projects supported by the Center. The organism can be called an “innovation center”: its mission would be to assist individual inventors (including university researchers). The center should be able to do preliminary evaluation. the commercialization and decision-making. 3. The offer of services of the innovation center should facilitate the development of their inventive and innovative ideas and assist them in commercializing or other dissemination on the market. the innovation center should offer certain major functions. the preparation of the business plan. support to negotiate a licensing agreement with a third party. an evaluation program. a specialist network or through a cooperative structure (which last could be an attractive option in developing countries). are to provide: an information and promotion program to answer questions from inventors. . the enterprise creation. inventions and innovation.55 In some cases intellectual property offices and private experts in this field tend to see themselves as intermediaries. The site http://www. which can be performed either with in-house staff.

First. Of course. takes place through legal relationships between the owner of the exclusive rights or the supplier of the know-how.61 There are three principal legal methods that can be used to bring about a commercial transfer and acquisition of technology. Hence. Law and Use Licensing and the Transfer of Technology Introduction 3. to manufacture products.” 3. periodicals or other publications on special scientific and technical subjects.172 WIPO Intellectual Property Handbook: Policy. it becomes necessary to buy those rights. or to buy the know-how that enables the invention to be put into practice in the most efficient way. called the transferor — and the person or legal entity which acquires those rights or that permission or receives that know-how.60 Those legal relationships are essentially contractual in nature. The Commercial Transfer and Acquisition of Technology In General 3. it is said that an “assignment” of such rights has taken place. which means that the transferor of the technology consents to transfer and the transferee consents to acquire the rights. especially the inventions described in patent documents. 3. not all the knowledge — the know-how — which facilitates or is otherwise useful for the working of the invention is set forth in the description of the invention that is found in the patent document. Without the authorization of the owner. called the “transferee.57 One means for accomplishing economic development through the transfer of technology is the commercial transfer and acquisition of technology. by the owner of the patented invention to another person or legal entity. 3. produce goods or render services.58 This is true for two reasons. others should not put into practice the patented invention.63 When all the exclusive rights to a patented invention are transferred. That concept of assignment is . or read patent documents. and in that way acquire knowledge of specific technology. as has been mentioned. Second. or to buy the permission to use the invention. Such personnel can in turn study books. without any restriction in time or other condition. Personnel can be educated or trained at research and development institutions. The Sale: Assignment 3.59 The sale and purchase of the exclusive rights to a patented invention or of the permission to use the invention or of the know-how. But these methods will inevitably fall short of enabling those personnel or others to apply that knowledge. the permission or the know-how in question. technical institutes or centers of higher learning. the exclusive rights to work an invention belong to the owner of that invention.62 The first legal method is the sale by the owner of all his or its exclusive rights in a patented invention and the purchase of those rights by another person or legal entity. technology can also be transferred and acquired by other than commercial methods. 3.

3.” The transferor is called the “assignor” and the other person or entity. the licensor may promise to defend in court a lawsuit brought by a third person against the licensee in which that third person claims that the working of the invention by the licensee violates the exclusive rights already conferred by the grant of another — a separate or distinct — patent for invention which is owned by that third person. 3.68 It is also possible that the conditions may relate to promises to be made or action to be taken by the licensor. For example.69 In a number of countries. Another condition might be that the invention will be used by the licensee only for the manufacture of products destined for a specific use. as for example. the manufacture of a pharmaceutical product for use by humans but not for use on animals. that is.” When an assignment takes place. more simply yet. the remaining explanations of the principles and characteristics of the license will be limited to the patented invention. .” The person or legal entity who or which receives that permission is referred to as “the licensee. It applies also to the exclusive rights in utility models.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 173 recognized in the laws of many countries. Thus. the making of products by a process that includes the invention.65 The second legal method is through a license. a requirement may be imposed that an instrument of assignment of patent rights be executed in a particular manner. in the country and for the duration of the patent rights. the legal form of the document evidencing an assignment or a license contract and other formalities and requirements concerning an assignment or license are prescribed by the patent law or by the commercial law. is called the “assignee. the transferee. Similar principles and characteristics apply to the assignment of other industrial property subject matter. The concept of “license” is also recognized in the laws of many countries.64 The legal act whereby the owner of the patented invention transfers those rights to another is evidenced by a writing in the form of a legal document generally referred to as an “instrument of assignment of patent rights” or “assignment of patent rights” or. one or more of the acts which are covered by the exclusive rights to the patented invention in that country. the permission by the owner of a patented invention to another person or legal entity to perform. It may be recalled that those acts are the making or using of a product that includes the invention. Again. It applies also to the exclusive rights in other objects of industrial property. as a “license. or the use of the process that includes the invention. For the sake of simplicity.” The owner of the patented invention who gives that permission is referred to as “the licensor. The License Contract 3. however. as well as other objects of industrial property. it may be required that the instrument be signed not just by the assignor but also by the assignee. The “assignee” becomes the new owner of the patented invention and is entitled to exercise all the exclusive rights in the patented invention. as an “assignment.” The license is usually granted subject to certain conditions which will be set out in the written document by which the license is granted to the licensee. industrial designs and trademarks. a “license” has been granted.Chapter 3. for the sake of simplicity. 3. as for instance. the further explanation of this legal concept will be confined to the principles and characteristics of the assignment of the patented invention. 3.66 The legal document evidencing the permission given by the owner of the patented invention is usually referred to as a “license contract” or. Another condition might be that the licensee work the invention in certain factories only or sell the product embodying the invention in certain defined areas only. the “assignor” no longer has any rights in the patented invention.67 One of the conditions will obviously be related to the payment by the licensee of money in return for the license that is granted. When that permission is given. 3. more simply yet.

75 The know-how may be communicated in a tangible form. photographs.71 The law may also require that the terms and conditions set forth in the instrument of assignment or in the license contract be reviewed or examined and approved by one or more designated governmental authorities. of personnel of the recipient. 3. that writing or document is normally called a “know-how contract. 3. packaging and storing instructions. manuals or instructions for the operation of machines or the assembly of components. the law might require the foreign investment commission or the central bank or both to review and approve the provisions of the assignment or the license contract. Examples of know-how that could be transmitted in such forms are architectural plans of the factory buildings. 3. 3.76 The know-how might also be communicated in an intangible form. or at the enterprise of the supplier. computer cards and microfilm. It is also possible to include such provisions in a license contract.” 3.70 In addition. Examples would be an engineer of the supplier of the know-how explaining a process to an engineer of the recipient or the manufacturing engineer of the recipient witnessing a production line in the enterprise of the supplier. For a variety of reasons. one party. process flowcharts. Whenever provisions concerning know-how appear in a separate or distinct writing or document. reports on stability and environmental aspects and job descriptions for technical and professional personnel. Another example would be training in the factory of the recipient. to communicate the know-how to another party — the recipient of the know-how. however. In the case where the know-how relates to a patented invention or a registered trademark or industrial design.77 Know-how in intangible form relating to the demonstration of. lists and specifications of new materials. lists of spare parts. blueprints. 3. manufacturing and other operations is sometimes referred to as “technical services.72 The third of the three principal legal methods for the transfer and acquisition of technology concerns know-how. Documents. the assignee or the licensee is recognized by the Government as the transferee or holder of the rights transferred by the assignment or of the rights conferred by the license contract. the diagrams of the layout of the equipment in the factory. or advice on. the provisions concerning the know-how might be placed in a separate or distinct writing or document. in a number of countries. The Know-How Contract 3. the patent law may require that an instrument of assignment of patent rights or a license contract be presented to the patent office for registration.” Know-how in intangible form relating to training is sometimes referred to as “technical assistance.74 Through such provisions. among others. drawings or blueprints of machines. the provisions are usually included in the license contract that deals with that patented invention or other object of industrial property. For instance. By the act of registration. the supplier of the know-how. This is particularly so when the owner of the patented invention or other industrial property subject matter is also the developer and holder of that know-how. labor and machine time calculations.73 It is possible to include provisions concerning know-how in a writing or document that is separate from a license contract. Law and Use 3. where technology is to be acquired from abroad or where payments in foreign exchange must be made. are illustrations of tangible forms.174 WIPO Intellectual Property Handbook: Policy. undertakes or promises. for the use by that other party. even in such a case.” Where the know-how . Such know-how in tangible form is sometimes referred to as “technical information or data.

either technical information. or financial and personal administration. and parts or other components. batteries. technical information and expertise of one party are combined with the investment of another party for the purpose of selling goods or rendering services directly to the consumer. distributor or dealer may own the premises or contribute . They may be consumable in use. technology transfer transactions. radiators and engines.78 The possibility that the know-how to be communicated by the supplier to the recipient might be disclosed.83 A franchise or distributorship is a business arrangement whereby the reputation. as in the case of automobiles or home appliances. Contracts covering the sale and purchase and the import of capital goods are sometimes associated with a license contract or with know-how provisions or a know-how contract. or secretarial help. 3.” The franchisee. or marketing. in a sense. or other operations such as planning. The owner of such a mark or trade name and know-how is called a “franchisor” or “licensor. which is to be cut and sewn into clothing. The services may extend to the rental of capital equipment.” “distributor” or “dealer.Chapter 3. such as cotton or polyester fiber.85 The outlet for the marketing of such goods and services is usually based on a trademark or service mark or a trade name and a special décor (the “look”) or design of the premises. 3.79 The commercial transfer and acquisition of technology can take place with the sale. it is sometimes referred to as “management services. for example. may be regarded as capital goods in that they are needed in the manufacture of other products.81 Such sales and purchases of capital goods and their import into the country can be considered.82 Commercial transfer of technology may also take place in connection with the system of the franchising or distributorship of goods and services. which are to be assembled into an automobile. 3.” The party to whom the license is granted and the know-how is supplied is called the “franchisee. 3. maintenance and administration. or woven cloth and leather. Franchising and Distributorship 3.” 3.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 175 in intangible form is to consist in the actual direction of manufacturing operations. purchase and import of equipment and other capital goods. for example. technical services. The provisions concerning know-how in the contract will thus cover various measures to safeguard against the disclosure of the know-how to unauthorized persons. provisions concerning the sale and purchase and the import of capital goods may be found in the license contract or the know-how contract itself. accidentally or otherwise. So also. automobiles. intermediate goods. can also be considered as capital goods in that although they are products in themselves. Sale and Import of Capital Goods 3. Examples of capital equipment are machinery and tools needed for the manufacture of products or the application of a process.80 Raw materials. such as tyres. or to hotel operations. In certain instances.84 The goods in question may be durable. technical assistance or management services concerning production. prepared food or beverages. crude oil or phosphoric acid. for example. as. is a very real concern to the supplier of the know-how. trucks or other power equipment. 3. they may be necessary for the manufacture of another product. or dry cleaning facilities. respectively. to third persons. The license of such a mark or name by its owner is normally combined with the supply by that owner of know-how in some form. marketing. such as gasoline or fertilizer.

89 As concerns planning. the supervision of the start-up and testing of the equipment and making findings on the state of performance of the process utilized. Usually. and the actual acquisition of. “Design and engineering” services are a typical example. such an individual or firm specializes in a particular type of service. 3. the preparation of tender documents for the construction of the building or the equipment and for civil engineering work.91 One or more individual consultants or firms of consultants might be engaged to render the services in question. the design of the factory building. or to a very limited number of technology suppliers. and hence the legal methods that they reflect.88 In such a business arrangement not only is help received in acquiring the technology but the experience gained and the lessons learned in engaging and working with the individual consultant or firm of consultants will be valuable knowledge that can serve to better carry out future projects. such as investment planning. Other aspects of the business relationship of the parties to the contract. 3.” 3. to the investment required. more particularly. the “turn-key project” may involve a comprehensive arrangement of certain of the legal methods. the evaluation of bids and advice on the award of contracts. The Turn-Key Project 3. construction and operation of a factory to a single technology supplier. the advice or services may relate to the choice of the product to be manufactured or improved upon and the technology to be used. whereby one party undertakes to hand over to his client — the technology recipient — an entire industrial plant that is capable of operating in accordance with agreed . for such enterprises. and to the suitability of each for the objective or objectives to be attained. however. Such services concern the preparation of the plan for the site of the plant. marketing or business organization and management. to the type of business organization or other relationships to be established. the consultancy services are forms of know-how. Law and Use money and time as an investment in the business firm. They can thus be considered within the framework of the know-how contract. the law may require that such franchise or distributorship agreements be registered and reviewed or examined and approved by one or more designated government authorities.86 As in the case of an assignment. the design of machinery and other equipment. two or more of the business arrangements.93 Thus. including sharing of the profits of the franchise or distributorship. a license contract and a know-how contract. 3. if not indispensable. can be combined in such a way as to entrust the planning. a given technology can be useful.90 The consultancy services might extend also to the implementation of a project. will be agreed to between the franchisor or licensor and the franchisee or distributor or dealer and set forth in a document called a “franchise agreement” or “distributorship agreement. In a sense.87 The help of an individual consultant or a firm of consultants that will give advice and render other services concerning the planning for. environmental impact. The Consultancy Arrangement 3.176 WIPO Intellectual Property Handbook: Policy. including the installation of the equipment. as well as giving advice in the initial period on the operation of particular equipment or the entire factory. design and engineering. the technical services contract or agreement. the supervision of the construction of the factory. 3. 3. entities and governments that wish to acquire technology from enterprises in other countries.92 In certain instances.

Neither contains measures to provide money or other resources that may be needed for further growth.99 The equity joint venture is an arrangement whereby a separate legal entity is created in accordance with the agreement of two or more parties. that is. supplementary arrangements might also be made for the acquisition of rights to the technology. raw materials or parts and components.95 Both the consultancy arrangement and the turn-key project arrangement have their shortcomings. the limited liability company. 3. The first does not usually entail the responsibility of the consultant for the results.Chapter 3. operation. and the share of each in the profits of. training and supervision of the operation of the plant. duration and termination. More usually. the purchase and installation of equipment. the contractual joint venture might be used where the establishment of a separate legal entity is not needed or where it is not possible to create such an entity. In the second.100 Where one or more of the parties is a foreign enterprise or entity. the turn-key project involves the undertaking by one party to supply to the client the design for the industrial plant and the technical information on its operation. 3. That is a symbolic way of expressing the completion of the tasks agreed to between the parties. or such parties are called a “foreign participant” or “the foreign participants. 3. The subject is further developed here as to the forms of joint ventures possible.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 177 performance standards. will agree on the purposes and functions of the limited liability company.96 Because of these shortcomings and for other reasons. each is said to have “an equity” in the company. This may be the case where the project involves a narrow task or a limited activity or is for a limited time or where the laws of the country in which the business operation is to be conducted do not recognize . and the legal methods applicable.” The parties or participants. at least in its initial stages. the equity joint venture and the contractual venture.101 On the other hand. The parties undertake to provide money or other resources as their contribution to the assets or other capital of that legal entity.94 It is called a “turn-key” project because the end result is to “turn” over to the client the “key” to the door of the industrial plant. such a party is. Each of the parties in turn become the owners of the company. That company becomes the owner of the resources that are contributed by each party. This is because neither contains a commitment to the technology acquirer to provide further advice or services or to provide improved or additional technology. 3. for civil engineering work and for provision of technical services and assistance concerning the construction of the plant. the technology supplier or suppliers are so responsible.98 There are two fundamental forms of joint venture. 3. joint venture arrangements can be more attractive means of industrial or commercial cooperation. In the latter event.97 The nature of a “joint venture” is briefly referred to under “Territorial Franchises” in chapter 2. and on such other matters as its management. That entity is usually established as a limited liability company and is distinct from either of the parties that participated in its creation. Neither the first nor the second provides means for a continuing involvement of the technology supplier so that access to later advances in its technology can be more readily facilitated. as they are called. 3. 3. the proportion of the capital each will contribute to. Joint Venture Arrangements 3.

3. They would be signed once the joint venture company was established.105 Needless to say the joint venture agreement. the know-how contract. however.106 Any technical licensing contract may be analyzed in respect of the following basic elements: the subject of the contract. The license contract. insurance and foreign economic and trade contracts. will be matters for negotiation between the prospective participants. More commonly. and the different contracts of the various legal methods that may be used. Through such contracts the technology in question can be transferred to the joint venture company which will thus acquire the means to enable it to carry out its operations.178 WIPO Intellectual Property Handbook: Policy. the technical services or the technical assistance contract. Law and Use the ownership of property by foreigners. whether it be for the establishment of a limited liability company or not. for one of the participants to grant a license of a patented invention or other object of industrial property or to supply know-how as part of that participant’s contribution to the joint venture company. 3. 3. including laws relating to labor. industrial design or trademark by one of the participants could constitute a portion of that participant’s contribution to the capital of the joint venture company. the franchise contract and contracts covering other commercial matters might even form annexes to the joint venture agreement. The result of their negotiations will be reflected in the joint venture agreement. the obligations common to both parties. Negotiation of Licensing Agreements Introduction 3. 3. It is also possible. sales of goods. the licensor’s obligations.104 Whether one or more of the legal methods are used in the establishment of the joint venture company.103 An assignment of the exclusive rights to a patented invention. Those contracts will be concluded between one of the participants as the transferor of the technology in question and the joint venture company. must be concluded in accordance with laws and regulations applicable to such companies and to the tax laws concerning those companies or to the laws relating to agency or partnership. of course. .102 The different legal methods for the commercial transfer and acquisition of technology can be used in either form of joint venture arrangement. 3. The relationship between the parties will be set forth in the contract or agreement concluded between them. These provisions are discussed from the point of view of the licensing of patents but they apply also to the other forms of intellectual property. such a license or the supply of know-how in one or more of its forms will be the subject of one or more contracts made after the joint venture company is established. or whether one or more of those legal methods are used and when so as to enable the joint venture to carry out its operations. as well as to other economic laws.107 The following topics are typically the subject of the negotiations leading to the conclusion of the license contract or which require special attention in drafting its provisions. a utility model.

they usually proceed on the basis that certain technology is necessary for the manufacture of a particular product or the application of a particular process from which a product or other result is to be obtained.109 The objective in describing the parties to a license contract is to identify each of them with sufficient certainty. Objectives of the Parties: Scope of the License 3. the ultimate objective of the parties in concluding a license contract is the transfer by the licensor.114 When the parties are negotiating a license contract. 3. should be drawn up and signed by the different parties on each side. Another group of those provisions will determine which of the parties may perform one or more acts of exploitation.” or directly in an operative element of the license contract. state enterprises or private entities. if any).116 The objective of the parties to the license contract will be expressed more specifically in subsequent provisions that delineate the “scope” of the license contract.113 Further. consisting of a particular article entitled “background information.112 Similar questions will arise where the other side to the negotiations is likely to involve a number of governmental authorities — ministries. consideration will have to be given to whether one document setting forth all the terms and conditions and commitments should be prepared and executed between all the parties on both sides or whether several documents. each containing distinct terms and conditions and commitments. the invention or inventions and the know-how and technological advances. 3.110 This objective assumes particular significance in complex business transactions between more than one entity or person on either side and between entities or persons in different countries. 3.111 For example.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 179 Identification of the Parties 3. commissions. One set of those provisions identifies the technical subject matter of the license contract (that is.115 Their objective will be reflected in a general way either in a preambular part of the license contract. 3. one side in the negotiations leading to the conclusion of the license contract may be a grouping of legal entities. in other words. including those established as a result of a joint venture with a foreign legal entity. designate the place or places where that act or those acts may take place. and the acquisition by the licensee.Chapter 3. or in the use or sale of a given product or in the application of a given process through which a product or other result will be obtained. consisting of a series of provisions often referred to as “recitals” or “whereas clauses. but in either case. 3.108 One of the first points of concern to the negotiators of the license contract will be the identification of the entities or persons which or who will become the parties or. control or other interest. will sign the license contract and become legally bound to carry out its provisions. 3. the product or the process. establish the duration of the exploitation and specify the purpose or purposes for which the . of a given technology and of the right to exploit that technology in the making. so that their identity will not later become a subject of controversy. with a common ownership. bureaus or administrations or other governmental units — or public entities.” 3. In such cases. all organized and located in one foreign country or each organized and located in separate countries. In other words. it may be contemplated that the patent license will be given by one of the legal entities in the group (or perhaps even by a legal entity outside the group) and that other performances will be undertaken or received by one or more of the other legal entities in the group.

to assist in the exploitation.122 The provision that identifies the invention or inventions included in the product or process usually refers to the number of the patent for invention or the application for the grant of a patent for invention. the date of the patent grant or the filing date of the application.” which would include. used or sold. as for example. The product might be defined more specifically. “instruments for the purpose of writing.119 The product might be identified somewhat broadly. the country where the patent was granted or registered or where the application was filed. if any. detailed and complete to permit a person having ordinary skill in the art to carry out the invention. specify the means.121 The title and the abstract included in the application for the grant of a patent for the invention that is embodied in the product or the process may be a useful starting point in providing the requisite information to describe the product or the process. Identification of the Invention 3. the relevant information in respect of each invention is usually grouped together and set forth in a schedule attached to the license contract. fountain pens.117 These provisions describe the product to be made. Where the product or the process in question includes a number of inventions. 3. Law and Use technology may be exploited. But those patent laws do not extend to requiring a description of additional means that may facilitate the carrying out of the invention. 3. Such additional means may consist of the use of technical information and expertise acquired through long experimentation with the invention. that provision is set forth in the part of the license contract dealing with definitions.120 The process might be identified as a chemical formula according to which certain chemical substances interact when a specified catalyst is introduced resulting in a specified product. they will also identify the invention or inventions included in that product or process. fix the remuneration for the exploitation and state the consequences of a failure of or of an interference with the exploitation of the technology or with other commitments agreed upon. one of the provisions in the license contract will identify in concise terms that product or process. Some patent laws go further. Identification of Product or Processes 3. for instance. Other provisions will prescribe the level of working of the invention or inventions. Subject Matter 3. describe the know-how. the description of the invention claimed in an application for the grant of a patent for invention must disclose the invention in a manner sufficiently clear. that is to be supplied and identify the technological advances of one party or the other. Description of the Know-How 3. or the process to be applied and from which a product will be obtained and in turn used or sold. as for example.118 Since the ultimate objective of the licensee concerns a product or process. ball-point pens and felttipped pens. . 3. and require also that the best mode contemplated by the inventor for carrying out the invention be described. only one or more but not all of those kinds of pens. and in some cases the title of the invention and the status of the application. In the typical case. if any. and the conditions under which those advances will be made available by that party to the other.180 WIPO Intellectual Property Handbook: Policy.123 Under the standard requirements of most patent laws.

technical information can be identified in terms of the relevant documentation. The most important forms of such abuse can be. as for example. for example. minimum royalty clauses. This information can be set forth in one or more annexes.127 The parties might decide that the mutual exchange of information on technological advances is in their best interests. The main requirement is that as a rule exclusive intellectual property rights represent a pro-competitive monopoly for a limited duration only. Tie-in clauses provide that the . in the case of a given process. labor and machine time calculations. or. They might also decide that if either party makes available the technological advance of the other to a third person for a remuneration. by imposing anticompetitive obligations on the licensee. conditions preventing challenges to validity and coercive package licensing. the fields of use.128 The license can have several contractual limitations regarding permissible activities (to make.125 Know-how is acquired or developed by the licensor in the course of research and development activities or through the application of industrial and business techniques in the operations of the licensor’s enterprise. and that each shall be free to exploit. if not superiority. appendixes or schedules attached to the license contract. It is usually provided further that the party making the technological advance should apply for patent protection. export bans. free of charge.Chapter 3. or the cost of its application.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 181 3. tie-in clauses. Access to Technological Advances 3. restrictions to part of the claims on them as well as territorial or quantity restrictions or limitations on the sale prices. the material conditions under which that process is applied. This is called cross-licensing. of the licensor in the field of technology concerned. As such. 3. or the efficiency of its application. packaging and storing instructions and information on stability and environmental aspects. Its supply to the licensee is consequently the result of a bargain in which the price is not just the payment of a monetary remuneration fixed by the license contract but also the commitment by the licensee not to disclose that know-how to third persons except under certain conditions or with the consent of the licensor. exclusive grant-back. Limitations of the License and Anti-competitive Practices 3. in the case of a given product. it is a resource which the licensor is willing to part with in exchange for an agreed price from the licensee or others who wish to use it. the technological advance of the other. The know-how may often be the reason for the current competitive position. any provision conflicting with the prohibition of antitrust or anti-competitive practices is usually to be considered null and void. for example.. diagrams of the layout of the plant. in the name of either and at the expense of the party applying. In the event that it does not elect to do so.126 The technological advance of immediate concern to the parties to the license contract will normally be one which significantly or substantially affects. lists of spare parts. the volume of its production. the other party may apply. drawings or blueprints of machines. 3.). specifications of raw materials. then the other shall be entitled to share in that remuneration in some agreed manner and amount. At the same time.124 As regards the description of such know-how. Confidentiality 3. Job descriptions can be drawn up for each expert whose technical or professional expertise is needed. so that their owner should not exercise his right by abusing his monopoly. the cost of its manufacture or the efficiency of its use. it is a valuable asset of the licensor to be preserved. e.g.129 However. to sell. etc. manuals or instructions for the operation of machines or the assembly of components.

The parties might wish also to set forth the commitments of the licensor. It serves to define the scope of that application by the licensee. A Member may adopt. 3. given the capabilities of each particular licensee. must be compared to the lower price which may be asked for if a limited purpose is agreed to. however. each specializing in different applications of the invention or the know-how in question.132 Which of the parties to the license contract will be able. They are related because each concerns the exclusive right of the licensor under the patent for invention granted to the licensor which will be the subject matter of the license contract. A decision on each of these questions must be clearly reflected in the license contract. and with what effects on arrangements with third persons in relationship with the licensor or the licensee. Permitted Field of Use 3. though. The comparison becomes all the more relevant if the licensee is not currently. consistently with the other provisions of the Agreement. who are also interested in exploiting the technology.130 Under the TRIPS Agreement Members agree that some licensing practices or conditions pertaining to intellectual property rights which restrain competition may have adverse effects on trade and may impede the transfer and dissemination of technology. use or sell the product that includes the patented invention or will apply the know-how in a certain manner with a view to obtaining a certain result and to exploiting the technology at a certain level. by virtue of its provisions. That permits the most practical way of exploiting the invention or know-how. Exploitation 3. 3. to perform what act or acts of exploitation. 3. the licensor may be able to grant a license or supply know-how to each of a number of other licensees. in the light of the relevant laws and regulations of that Member. in a position to exploit the technology beyond the limited purpose.134 In the long run. At the same time. grant-back clauses secure exclusive rights to improvements in favor of the licensor. it may be desirable for the licensee to have the opportunity to apply the technology for all purposes. .133 A provision on the field or fields of use or activity specifies the purpose or purposes for which the invention or the know-how may be applied. in what territory or territories.136 The parties might wish to specify that the licensee will make. Territorial Exclusivity 3. 3. appropriate measures to prevent or control such practices. are distinct but related questions. The price asked for in that case.131 Nothing in the TRIPS Agreement prevents Members from specifying in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights. Law and Use licensee may purchase materials only from certain sources. the performance of which will assist the licensee in achieving the expected manner and extent of working or other exploitation.182 WIPO Intellectual Property Handbook: Policy.135 The licensor expects that the licensee will not only exploit the invention and apply the know-how but will do so to the fullest extent permitted by the terms and conditions of the license contract. nor in the future likely to be. depending on that defined scope. with an adverse effect on competition in the relevant market.

143 The time-scale of a licensing contract. Such an assurance is referred to as a guarantee of knowhow. subject to possible limitations under the law of the licensee’s country. a clause designating the WIPO Arbitration Center as the forum for settling disputes may be added to a license contract. It could be also that the party alleged to have defaulted. and there is no provision in the license contract which fixes the agreed consequences in respect of that failure of performance. Duration of the License Contract 3. denies that there has been a failure to perform as agreed. some machinery for the settlement of the dispute should be provided for before recourse is had to the courts or other tribunals. In particular. It might be phrased in terms of the results to be attained by the application of the know-how.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 183 3. or the findings and recommendations of a group consisting of representatives of each side.141 Normally. It might be phrased in terms of the suitability of the know-how to meet the technological requirements of the licensee. duration and termination. Thus. In either event. or to conciliation or to arbitration proceedings or. for instance.138 The licensee may seek an assurance that the know-how supplied will be adequate to attain the objective agreed with the licensor. the import of the product to meet local demand in the absence of sufficient working in the country itself and the use of the distribution channels of the licensor. one party might propose a solution that is satisfactory to the other. 3. the maximum is generally . the law of the licensee’s country would be applicable and the courts of that country would be competent since most. to the courts or other tribunals competent in the matter. a correction will be made or some other act will be done in its place. its commencement. That solution might be the allowance of additional time to render the performance or the substantial correction of the flaw or flaws in question.140 When non-performance is likely to or does occur. Settlement of Disputes 3. In these ways. the law of the country where a given act or performance is to take place governs the disputes arising out of that act or performance and the competent courts are the courts of that country. the contract may stipulate. However. 3. must be stipulated in the contract. a guarantee is an assertion that a given fact or event concerning the knowhow exists or that a given performance will take place if the know-how is applied. the making of part of the product by third persons to be authorized by the licensee.Chapter 3. that disputes arising under the contract will be subject to arbitration rather than to judicial proceedings. an amicable way of settling the dispute between the parties could be arrived at without recourse to legal remedies in the courts or other tribunals. the volume of production. that assertion is accompanied by a promise that if the fact or event does not exist or the performance does not take place. recourse might have been to the advice of independent experts. if not all acts or performances take place in that country. An intellectual property right can be licensed for the maximum period of time during which it is in force (for patents. that is. In this context. In the case of a license contract involving a foreign licensor and a domestic licensee.137 The questions that usually arise in respect of the manner and extent of exploitation are concerned with the following matters: the quality of the product.142 Yet circumstances could arise when the party injured by the default in the performance of the other is not offered a satisfactory solution. ultimately. 3. 3. It might mean that some other performance in lieu of the defective performance would be acceptable.139 The guarantee provision of the license contract might be phrased in terms of the conformity of the know-how supplied to the agreed description of what was promised to be supplied.

either stipulated in advance or negotiated as rendered. as elaborated below. The prospective transferor usually makes a careful assessment in terms of value or the need for the particular technology. that under the laws in certain countries governing the transfer of technology. and (c) “fees. the various rights or elements of technology may have to be separately priced or valued and even made the subject of distinct licenses or agreements. as in the case of royalties.184 WIPO Intellectual Property Handbook: Policy.145 The potential transferee assesses the total payments likely to be made for a particular technology and for advances in that technology against the profitability of the enterprise over a period of time and also evaluates such payments in relation to costs of alternative technology or payments made with respect to similar transactions. fixed at a specified amount or calculated per person and per period of service. Lump-Sum Payment Compared with Royalties 3.144 The “price” or the “cost” of the acquisition of industrial property is dependent upon a number of factors.147 These forms of remuneration may be combined in a given industrial property license or technology transfer agreement. (b) “royalties”. the licensee or technology recipient may be given the opportunity to elect to pay royalties on production units rather than on sales. as where the licensee or technology recipient may elect to make a lump-sum payment in lieu of one form of royalty or another. a pre-calculated amount to be paid once or in installments. 3. The prospective transferor also makes detailed projections of production and consequent income flow from other potential licensees or technology recipients. 3. service units. Shorter licensing periods may also be agreed upon and the parties may reserve the right to terminate the contract with future effect in case of specified circumstances. Law and Use 20 years). the alternative technologies available. however.” compensation for services and assistance rendered by technical or professional experts.148 It is to be noted. In other instances. Direct Monetary Compensation 3. The fees for technical services and assistance may be determined separately.146 Direct monetary compensation for industrial property rights or for technology may take different forms: (a) “lump-sum payment”. 3. . the prospect of technological advances and the likely production and profitability of the potential transferee. while in other instances the two might be combined one way or another. including the nature and duration of the industrial property rights and the technology and the relative bargaining power of the parties. the lump-sum payment form may replace the system of royalties altogether. the amount of which is determined as a function of economic use or result (production units. sales of the product. Further. post-calculated. profits). the parties do not have to make continuous accounts or control the calculation or the remittance. Remuneration Introduction 3.149 The lump-sum payment is characterized by the fact that the obligation is fulfilled immediately or fairly shortly. In some instances. recurring payments.

the lump-sum payment may also entail risks for the licensee or technology recipient if production or sales of the product lag behind expectation and if the lump-sum payment is disproportional to the economic value of the performance of the licensor or technology supplier. for example. the licensor or technology supplier would receive only the counter value of the single performance which was thought justified at the time the agreement was concluded.156 Specific technical services and assistance. unexpected high sales are reached. when compared with royalties. and may have to be paid for separately. The licensor or technology supplier will also have to pay taxes on the lump-sum payment.152 On the other hand. Further. The single lump-sum payment. to be provided by the licensor or technology supplier. may be subject to a different (often higher) tax rate than income in the form of royalties. the system of royalties leads to unexpected and unjustified returns to the licensor or technology supplier. a sale or purchase operation. while projections of production estimates and of cash-flow from sales during the period of the license or agreement are essential in assessing the percentage rate of royalties. Under some tax laws. for example. In some instances. with the assignment or transfer of the industrial property rights and the supply of the know-how considered analogous to the sale of commercial goods.155 In negotiating remuneration in the form of a combined lump-sum payment and royalties. 3.Chapter 3. the initial lump-sum payment may be viewed as a minimum payment or regarded as a down payment or advance against royalties. may or may not have certain tax advantages. Lump-Sum Payment and Royalties Combined 3.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 185 3. 3. If. however. The burden of interest charges. with a credit against the payment of the royalties already made.153 In many cases. The continuous payment of royalties is considered to be income to the licensor or technology supplier from the viewpoint of taxation and. Fees for Technical Services and Assistance 3. royalties are subject to income tax. may be necessary in connection with the transfer of the technology or the marketing of the product under a trademark. in lieu of royalties. as such. The actual initial payment varies a great deal from transaction to transaction and may range from a small sum for the delivery of initial technical information to a very large amount for sophisticated technology that has required much research and development. the remuneration for industrial property rights or know-how is a combination of a lump-sum payment and royalties. especially under the influence of monetary fluctuations or other economic circumstances.150 The lump-sum payment. and even the lump-sum payable in instalments.151 Where a more or less single performance is the counter value.154 The lump-sum payment is often treated as an initial payment for disclosing information that enables the potential licensee or technology recipient to evaluate the technology. The single lump-sum payment. . 3. stipulated in advance or negotiated at the time of the election to make that payment. the licensee or technology recipient will need to evaluate carefully the total outflow and incidence of the payments that may be likely for various combinations. Upon the payment of a lump-sum. is important in determining the size of the lump-sum figure. 3. the licensee or technology recipient may be given the opportunity to make an additional lump-sum payment. it may be possible to alleviate the higher or progressive rates on the lump-sum payment if it is split into instalments and paid over several tax years and thus subject to lower tax rates. the lump-sum payment may lead to results economically more justified between the parties. may be considered the counterpart to. or the financial result of.

which may lead to an increase in the value of the financial participation. attention is directed to the laws in certain countries governing the transfer of technology which treat as profits payments in respect of the price of industrial property rights or technology made between a subsidiary and its parent. equipment or other capital goods released by the licensor or technology supplier to the licensee or technology recipient.186 WIPO Intellectual Property Handbook: Policy. (b) fees for technical services and assistance to be rendered by technical experts of the licensor or technology supplier to the licensee or technology recipient at the latter’s industrial plant during the period of the license or agreement. If an essential part of the commercial operations depends upon the industrial property rights or technology of the licensor or technology supplier. there may be a direct dependency between the amount of the royalties and the amount of the dividends: the higher the royalties.161 Under the laws in certain other countries governing the transfer of technology. equipment or other capital goods needed in the utilization of the technology at the industrial plant of the licensee or technology recipient. profits from the sale to the licensee or technology recipient of related products which complete its marketing program. profits from the sale of the product supplied to the latter under exclusive purchase arrangements. Some of these laws also provide that in such cases the lump-sum payment or royalties may neither be treated as a contribution to capital nor constitute shares in the profits or in the capital of the enterprise of the licensee or technology recipient nor be deducted for the purpose of calculating the tax on its income. or where effective technical. The degree of participation and financial and tax factors may dictate the relevant amount to be assigned to each and the formation of reserves or the holding back of profits. financial and commercial management of the technology transferee is exercised by the technology transferor. or between subsidiaries. the amount of the royalty payments must be reduced substantially in the event that the licensor or technology supplier has a majority participation in the licensee or technology recipient. (c) fees for technical services and assistance which concern machinery.159 If the licensor or technology supplier assumes a financial participation in the enterprise of the licensee or technology recipient or if they enter into a joint venture. and vice versa. parts or other components and rentals from machinery. dividends from the financial participation.160 In this context. in the event of successful commercial operations. intermediate goods. although royalties may be paid by the licensee or technology recipient to the licensor or technology supplier even where the latter has a financial participation in the former. These may be commissions on the sales of the product made on behalf of the licensee or technology recipient through the distribution channels of the licensor or technology supplier. Law and Use 3. administrative. 3. . profits from the sale to the licensee or technology recipient of raw materials. the lower the dividends. or where there exists economic unity or community of interests between the parties.157 The fees for specific technical services and assistance related to a patent or trademark license or a technical know-how agreement include: (a) the cost of training programs for the personnel of the licensee or technology recipients.158 The licensor or technology supplier may receive income from various operations. Indirect and Non-Monetary Compensation Income from Related Operations 3. the licensor or technology supplier will obtain. 3. or where the technology transferor supplies raw materials or intermediate products used in the process in an amount equal to more than a specified percentage of the total cost of the product. in addition royalty payments by a wholly owned subsidiary to its foreign parent company are ordinarily not permitted. Dividends 3.

the currency chosen may be that of the country where sales take place. developments in know-how. access for the licensee or technology recipient to information concerning improvements to existing inventions.Chapter 3.169 In the case of royalties. If the royalty amount is linked to sales.163 The technical know-how of the licensee or technology recipient which is to be turned over to the licensor or technology supplier can also constitute a form of income to the latter.164 The licensor or technology supplier may benefit from data provided by the licensee or technology recipient concerning the marketing of the product in the local area. or the country of the licensee or technology recipient or a third country. Cost Reductions and Savings to the Licensee 3. Description of the Currency of the Obligation and of Payment 3. including new sales promotion techniques. 3. The first concerns the determination of the currency which will serve as the measure of the obligation to pay. and the currency or currencies of . which may prove useful to the marketing of the product in other areas. Currency of Obligation 3.166 Mention may be made of such measures as the utilization by the licensee or technology recipient of the channels of sales distribution of the licensor or technology supplier. for example.162 Certain cost shifting or sharing measures. if the royalty amount is linked to the volume of production and does not depend on the value of the unit produced. new inventions of the licensor or technology supplier or rights in respect of such technological advances. more than one currency may be chosen — the currency of the country of the licensee or technology recipient where production and domestic sales occur.165 Some elements of a given technology transfer transaction may have the effect of reducing the operating expenses of the licensee or technology recipient or otherwise lead to savings on the part of the technology transferee. The currency of obligation and the currency of payment may be one and the same. Acquisition of Market Data 3. the expenses in maintaining or defending rights under the patent or the trademark. but may also be different. the currency chosen may be either that of the country where production takes place or that of another country. Feed-back of Technical Information 3. and the second relates to the choice of the currency in which payments will be made to discharge that obligation. 3. that are adopted. the use without payment of the trademark of the licensor or technology supplier. and the opportunity to benefit from the marketing information and other technical services and assistance of the licensor or technology supplier. may have the effect of reducing the expenses of the licensor or technology supplier and increasing the cost to the licensee or technology recipient of the technology transfer transaction.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 187 Cost Shifting or Sharing Measures 3.167 It is necessary to distinguish two aspects of the question of currency designation.168 The currency of the obligation in the case of the lump-sum payment may be the currency of either the country of the licensor or technology supplier. If export sales are likely. as is often the case in an international commercial transaction.

3.175 Under a patent license. 3. however. with payment in whole or in part in the currency of that country and the remainder. the official rate established by national or international monetary authorities. the determination will most likely be between the currency of the country of the expert and the currency of the country where the services are performed. These are whether the currency of obligation can be utilized in the country of that currency by the licensor or technology supplier. the amount of the fees will normally be determined in the currency of the country of the expert. Generally.188 WIPO Intellectual Property Handbook: Policy. the technical subject matter of the invention is briefly stated in the preamble or in the article defining terms used in the contract. whereas. the existence of currency exchange controls in the country of the currency of obligation or where the income of the licensee or technology recipient is generated. Rate of Exchange 3. plus the portion attributable to living expenses and other facilities in the country of the licensee or technology recipient. If royalties are linked to the profits of the enterprise of the licensee or technology recipient. Any one of a number of different exchange rates may be selected. together with its number. the inflation rate in the country of the currency of obligation. though the currency of the obligation may be expressed in a foreign currency at least the expenses connected with the maintenance of experts in the country of the licensee or technology recipient must be paid in the currency of that country.172 Many factors may play a role in the choice of the currency of payment. under the laws in some other of these countries. . the stability in the international money markets of that currency in relation to other currencies. such as the telegraphic transfer selling rate or other selling rate or other rate of a specified domestic or foreign commercial bank. then the currency of the country where that enterprise is legally organized may be chosen.173 In the event of the currency of payment chosen differing from the currency of obligation. for example. 3. The patent involved is identified by stating the name of the country in which it has been granted. Law and Use the country or countries where the export sales are made. Patent Licenses 3. though remittance abroad may be made in the equivalent foreign currency.174 The typical provisions of an intellectual property license are discussed above in general terms. the purpose of the contract is to authorize the use of an invention protected by a patent. Types of Intellectual Property Licenses Introduction 3.171 Under the laws in certain countries governing the transfer of technology. it is provided that the currency of the obligation must be currency of the country of the licensee or technology recipient. if any. or an average of the said rates or a commercial rate. the rate of conversion will normally figure as a provision in the license or agreement. and the applicability of tax laws which may provide special benefits for one party or the other.170 As concerns fees for technical services and assistance. in the case of services performed by experts sent to the country of the licensee or technology recipient. Some of the more important of these provisions are listed below. Some provisions are particular to the type of intellectual property being licensed.

183 Trademark licensing is of fairly recent origin in trademark history. carry a licensor’s mark. The exercise by a licensor of quality control over the products sold by a licensee to which the mark was affixed opened the door to the fiction that such control was a manner for the user to avoid the expungement of the mark. This clause thus avoids any distortion of competition that would result from differing contractual conditions for the supply of technology. it is recommended to include in the contract what is known as the “most favored licensee clause. 3. without deception. goods emanating from a source other than the trademark owner could not. 3. a non-exclusive license or a simple license. does not do so within the specified period. Indeed the grant of a trademark license rendered a licensor vulnerable to a claim of non-use and so to invalidation of his mark.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 189 Reference is also frequently made to a separate annex when the license concerns a number of patents issued in differing countries.” Such a clause ensures that the licensee will enjoy the most favorable conditions that may subsequently be granted to a second licensee (for the same territory). 3.179 The right to sue infringers is normally the privilege of the licensor as owner of the patent. So-called “nochallenge clauses” which prohibit the licensee from contesting the validity of the licensed patent are anti-competitive. an exclusive licensee can sue for infringement in the name of the patent owner. The Registrar is obliged to ensure that registration of such agreements . to sell it or place it on the market. not even that of the licensor or of the latter’s subsidiaries. a licensee may be granted the right to institute infringement proceedings without having to request the owner of the patent to do so. but simply constitutes an authorization to use the invention. 3.181 In a contractual license. Since the original function of a trademark was to indicate trade origin. and has the right to institute infringement proceedings in his own name if the owner of the patent. An exclusive license guarantees that the licensee will have no competition. A sole license guarantees the licensee that the licensor will afford no licenses to other manufacturers within the contractual territory. A non-exclusive license means that another license for the creation has been granted in the contractual territory. A simple license provides no guarantees in that respect. However. or.177 A license may be an exclusive license. It is advisable to state exactly those countries in which patent applications are still pending and to stipulate which of the parties is responsible for complying with the administrative and legal formalities required for the upkeep of the patent. a sole license.Chapter 3. Trademark Licenses 3. Generally.178 In such cases. 3. the licensee may be completely barred from instituting infringement proceedings. to manufacture it. after being called upon to do so by the licensee. This fiction formed the basis of the registered user provisions inserted into most trademark statutes for more than forty years. This must be stipulated in the agreement.180 Any licensee is protected against the inaction of the patent owner in case of infringement. 3. 3.176 A patent affords a set of exclusive rights: to use the invention. a license provides an authorization for the licensee to carry out all those acts.184 Most registered user provisions require the license parties to submit their agreements to the Registrar who scrutinizes them to ascertain the nature and extent of the quality controls to be exercised by the licensors. 3.182 A person licensed to use a patent may challenge the validity of a patent.

It will be important for the licensee to know how many other licensees will be appointed to service the license territory. all specifications. the WIPO General Assembly and the Assembly of the Paris Union adopted a Joint Recommendation Concerning Trademark Licenses providing a maximum list of information and elements that an Office may require for a license to be recorded (Article 2(1)). that registration has been considered not to be essential for validity of a trademark license. 3. 3.186 Trademark licenses may be granted as adjuncts to or separately from patent and know-how licenses. materials used.187 Permission to Use. 3. 3. technical data and know-how of the licensor to allow the prescribed quality standards to be met. The Recommendation also attempts to limit the effect of non-compliance with recordal requirements to the license agreement itself by stipulating that non-recordal of a license should not affect (i) the validity of the trademark which is the subject of the license (Article 4(1)).191 Financial Arrangements. Policing of this clause will usually require the user to send sample products to the licensor and to permit inspections of the user’s factory and warehouses and of methods of production. Provided a licensor maintains control over the quality of the licensed products and the licensor is perceived as retaining a connection with the licensed products. It will also be important to ascertain whether the licensor intends to distribute within the territory. and the Registrar is required to refuse registration to agreements which appear to him to facilitate trafficking.190 WIPO Intellectual Property Handbook: Policy. It should be noted. provided they do not carry the trademark. This will usually contain prohibitions against trading outside the designated territory as well as provisions keeping the licensor out of the license territory.189 Quality Control. 3. Finally. however. Arrangements also have to be made to allocate the cost of . Advertising material employed by the licensee may have to receive the licensor’s approval. invalidation can be avoided. As mentioned above. together with the products in respect of which the mark is to be used. (ii) any right that a licensee might have under the legislation of Member States to join infringement proceedings initiated by the holder (Article 4(2)(a)) and (iii) the question whether use of a mark by a third person can be considered use by the trademark holder which can be relevant in the context of use requirements (Article 5). The particulars of the mark or marks are usually listed in a schedule to the license agreement. 3. In addition to a fee or royalties for being permitted to use his trademarks. storage and packing of finished products. Law and Use accord with the national interest. The grant of permission to use the relevant mark or marks is the first-stated provision of most license agreements. on a confidential basis. Quality control provisions will provide that the user receives.188 Number of Licensees. The registration provisions have been described as permissive and not mandatory. it will be important to a licensee where others are to be appointed to ensure that its rivals are appointed on comparable terms. The agreement should permit the user to dispose of products which do not meet the quality standard.185 It should be noted in this context that in September 2000. at the heart of any registered user agreement is a provision that the licensee will not use the marks on products which do not attain the standard of quality prescribed by the licensor. Among the provisions particular to most trademark licenses are the following: 3.190 Marketing. a licensor may also require payment in respect of the provision of skilled persons to instruct employees of the licensee in the materials required to achieve the prescribed quality standards required in the agreement. The license will designate the territory in which the trademark may be used.

” Such rights serve the purpose of reproducing or communicating to the public. 3. the work (or its translation) in specified forms other than the standard trade edition. 3.198 In the case of a license to publish the work in translation. a license must also enable him to protect his publishing activity against third persons. the right to publish the entire work or parts of it in one or more successive issues of a newspaper or periodical. 3. the right to read extracts from . Copyright Licenses (Publishing) 3. and with regard to possible further exploitation of the publication under the contract. or also for subsequent ones. and the licensor is usually responsible for conducting infringement proceedings.199 In order to promote the dissemination of the work published. to provide. a characteristic publishing contract is a mere license granted to the publisher by the owner of copyright. that is. he acquires an exclusive license (providing him with an exclusive right) to reproduce and publish the work concerned — or.192 Infringements. reproduce and publish its translation — in a standard trade edition. the language (or languages) of the authorized edition (or editions) must be specified. or by stipulating a minimum and/or maximum number of copies (“the print run”). assignment of the author’s right to publish the work may not even be possible. or licensing others to reproduce or communicate to the public. before or after publication of the work in the standard trade edition. the owner of the copyright usually only undertakes to restrict the exercise of his right in the work to be published and restrict it to the extent necessary for the publisher to be able to use the work. the licensee is usually required to keep detailed books and records of sales of the trademarked products. When entering into a publishing contract.Chapter 3. Generally. At the same time. serial rights. 3. 3. The licensee is normally required to report to the licensor all particulars of infringements that occur. if appropriate. the owner of copyright does not need and usually does not intend to part with his copyright or even his right to control the publication of his work. Under certain copyright laws. The agreement on the size of a single — or the first — edition usually takes into account the need to comply with the presumable demand of the public.193 In the case of a publishing contract. at costs permitting sales at the usual retail price per copy prevailing in the given book market as regards similar publications. comprising a reasonable number of copies.197 The license can be granted for one edition only. 3.196 The publisher should be granted a license comprising all the rights necessary for optimum realization of the planned publication. which consider the author’s economic rights inseparable from his moral rights.194 Thus. Finally. 3. The size of a single — or the first — edition is usually determined in the contract either by fixing the number of copies it should comprise.200 Such subsidiary rights may for instance comprise: the right of previous and subsequent publication in the press of one or more extracts from the work. To be of value to the publisher. the licensee may acquire also certain so-called “subsidiary rights. the ownership of copyright does not change but remains with the author or other owner of the copyright. 3.195 A license is generally understood in the field of copyright as the authorization given by the author or other owner of copyright (licensor) to the user of the work (publisher or other licensee) to use it in a manner and according to conditions agreed upon between them.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 191 the sampling procedure.

such as dramatization rights for stage or film production. the right to arrange for pocket book or book club editions subsequent to the standard trade edition. the right also to license the reproduction of the published work by means of making microfilms or other reprographic reproductions thereof.” 3. or of the so-called “strip cartoon rights”. 3. For example. All these kinds of reproduction by means of modern technology are often referred to in contemporary publishing contracts as “mechanical reproduction” of the work. is often made subject to special authorization in each case. in the framework of subsidiary rights. and the rights involved as “mechanical reproduction rights. This may prove useful especially in countries where no appropriate “moral rights” provisions are established by legislation.207 With regard to certain formalities required in a few States (mainly in the United States of America) as a condition of the full enjoyment of copyright in published works. 3.203 The grant of “digest rights” (the right to publish an abridgment or shortened form of the work). it also can be added that “the Publisher undertakes to print the name of the original publisher (that is. it is often added that “he shall see to it that the book is .” 3. or addition thereto. or for sound or television broadcasting. 3. Sometimes. it is generally stipulated in publishing contracts that an appropriate notice of copyright shall be printed on the title page. The notice consists of the symbol C. Again.201 Publishers often request the licensor to confer on them.” which means the right to reproduce a musical work in the form of sound recordings.192 WIPO Intellectual Property Handbook: Policy.205 As regards translation of the work. it may be agreed that “the publisher shall reproduce the work without any amendment or abbreviation thereof. the right to include the published work or a part of it in an anthology. also the right of licensing the reproduction of filmstrips is requested. in view of the moral interests of the author relating to the integrity of his work. The title of the translation is subject to the written approval of the copyright licensor.202 It is a reasonable and usually accepted position not to confer on the publisher rights to exploit the work in any manner involving its adaptation. or ©..” In cases where his license has not been confined to one edition only. The publisher may also request the right to license storage of the work in a computer.208 As regards distribution of the copies published. accessible to the public.” This term should not be confused with the notion of the “musical mechanical right. it is usual to agree that “the publisher shall have a precise and faithful translation made at his own expense.” 3.204 With regard to the integrity of the work to be published. 3. for purposes beyond the limits of fair use allowed by the law. or translation rights in general.206 It can also be stipulated that “the Publisher shall ensure that the title of the work and the name of its author shall appear with due prominence on every copy produced.” Depending on the circumstances. publishers may request the licensor to entitle them to license the reproduction of the work in the form of sound recordings as well. the exploitation of such rights goes beyond the scope of the promotion or direct exploitation of the publisher’s own publication of the work.. special stipulations can be incorporated in the contract.) as well as the year(s) of the previous edition(s) of the work on the verso of the title page. 3. Strictly speaking. Law and Use the work in sound or television broadcasting. it is often stipulated that “the Publisher shall provide for efficient promotion of the work at his own expense. On request. . the year of the first publication of the work and the name of the owner of the copyright in the work. the final text of the translation shall also be submitted to him for approval.

but also. whether as dividends. these controls are part of a more comprehensive system of laws dealing with foreign investment in the country. the failure to comply may render the license or agreement void or unenforceable and subject the party responsible to a penalty or to the suspension of its right to trade or to loss of its business organization status. etc.212 The intent is not only to protect the local enterprise that is contracting to acquire the technology. 3. as a whole. . the inflow of technology is subject to a variety of controls as a means of ensuring that contracts concerning transfer of technology are consistent with the economic aims of the government. 3. the controls result from the foreign exchange regulations which are directed at the flow of payments abroad. It is of vital importance to a developing country that — even though badly needed — the acquisition of foreign technology should not impose an undue burden on its economy.209 In many developing countries. Indirectly. or obtaining an authorization from the fiscal authorities to make payments abroad or to receiving fiscal or other benefits designed to encourage or promote investment in certain sectors or industries. 3.210 The failure of the responsible party to submit for registration or approval an industrial property license or technology transfer agreement or its modification.213 The Model Law provides that the examination and registration of contracts is a task of the Patent Office. In still other developing countries. misallocation of financial resources. In others. or income in other forms or as the return of capital.Chapter 3. contains provisions establishing a legal and administrative framework for the examination and registration of such contracts in accordance with the policy of ensuring that such contracts do not impose unjustified restrictions on the acquirer of the technology (“the transferee”) which would have the consequence that the contract. In some countries.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 193 continuously available. particularly lower tariff rates or exemptions on products embodying needed technology. 3. depletion of natural resources. there may be serious consequences. Under the relevant laws. and that new editions are printed in due time so as to comply with actual demand. According to the organizational structure of the government. a decline in the industrial growth rate. If the cost of technology should exceed its value to the local economy. These systems include the requirement that industrial property licenses and technology transfer agreements be notified to government authorities or be registered or approved by them in accordance with criteria established by the legislation or set forth in regulations or guidelines issued by appropriate governmental bodies. legal systems have been devised specifically to control the transfer of technology to.211 The WIPO Model Law for Developing Countries on Inventions (Volume II).” Government Control of Licensing Agreements 3. which frequently is in a relatively weak bargaining position. amendment. unfavorable balance of trade. to prevent the economic policy of the government being frustrated by certain contracts. The registration or approval of the license or the agreement may be a prerequisite to giving evidence of actual exploitation of a patent or actual use of a trademark in the country. and even to a higher degree. import regulations. royalties. or within. may also have an effect on the inflow of technology. would be harmful to the economic interests of the country. extension or termination. for example. to the appropriate government authorities within the time limits and under the other conditions prescribed has a number of legal consequences. the country. instead of the Patent Office. another government agency could be entrusted with this task.

without receiving appropriate payment. to restrict the transferee’s freedom to export or his freedom to allow others to export the products produced by him. in a country to which such . commercial. for all practical purposes.) which may enter into a determination of the effect a given contract will have within a given economic environment. to oblige the transferee to make available to the transferor. is harmful to the economic interests of the country. to oblige the transferee to sell the products produced by him exclusively or principally to persons designated by the transferor. In other words. unless it is otherwise impossible. if it does entail such effects.194 WIPO Intellectual Property Handbook: Policy. taken as a whole. technological. registration of the contract can only be refused if the restrictions imposed upon the transferee are unjustified and if the contract. provided that if the transferor owns. the presence in the contract of any of the 17 terms listed does not necessarily entail a refusal to register the contract. Law and Use 3. to restrict the transferee’s freedom to use any materials which are not supplied by the transferor or by sources designated or approved by the transferor. Secondly. indeed. to ensure the quality of the products to be produced and provided that the said materials are supplied at a reasonable price. this can be the case if the contract contains a term not appearing on the list but which imposes certain restrictions upon the transferee so that the contract. for all practical purposes. depending on the circumstances of the case. the Office must apply the provisions with flexibility. to oblige the transferee to acquire any materials from the transferor or from sources designated or approved by the transferor. to oblige the transferee to make payments which are disproportionate to the value of the technology to which the contract relates. to ensure the quality of the products to be produced. to ensure the quality of the products to be produced.214 In order to assist the Office concerned in the examination of such contracts the Model Law establishes a list of 17 terms that the Office must particularly take into consideration. taken as a whole. 3. these might be offset by positive effects for the economic interests of the country brought about by the presence of other terms in the contract. to restrict the transferee’s freedom to acquire any materials from any source unless it is otherwise impossible. for all practical purposes. while considering the particular merits of each contract in the light of the economic interests of the country. the presence of the term in question might not entail detrimental effects to the economic interests of the country or. to limit the quantity of the products produced by the transferee. etc. any improvements made by the transferee with respect to the technology to which the contract relates. unless it is otherwise impossible. since no codification of specific terms can anticipate the practically unlimited number of background factors (business. The list of 17 terms is not exhaustive: registration of a contract can be refused even if that contract does not contain any of the terms listed. is harmful to the economic interests of the country.215 The said 17 terms are those the effect of which would be: to import technology from abroad when substantially similar or equivalent technology may be obtained on the same or more favorable conditions without any importation of the technology from abroad.

or if the transferor already supplies the market in such a country with the same products. to any right of the transferor under a patent. however. after the expiration of his contractual obligations.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 195 a restriction applies. recommends a flexible approach which allows the examination of each contract on its merits within the general economic and technological context of the country concerned. to restrict the transferee’s freedom to use any technology other than the technology to which the contract relates.Chapter 3. 3. and several States progressively became independent and other States were newly created. subject. Particularly since the 1950s. Some developing countries.218 Most developing countries. particularly in the field of science and technology. 3. developing countries have had to cope with the enormous problems of educating the vast masses of their peoples. provided that any period which does not exceed the duration of the patent to which the contract relates shall not be regarded as unreasonably long. in order to meet the need for staff and management personnel to . to exempt the transferor from any liability resulting from any defect inherent in the technology to which the contract relates or unreasonably to restrict such liability. to extend the coverage of the contract to technology not required to achieve the objective of the contract and to oblige the transferee to give consideration for such technology. when the political map of the world changed considerably. to establish the duration of the contract for a period which is unreasonably long in relation to the economic function of the contract. are facing acute challenges in respect of encouraging and fostering intellectual creativity and satisfying the urgent need for promoting knowledge. have given priority to the training of their peoples and to education. the technology acquired as a result of the contract. if the transferor has a contractual obligation not to allow others to export the said products to such a country. Copyright and Development 3. to fix prices for the sale or resale of the products produced by the transferee. although it enumerates some of the most important clauses to be considered.216 The system provided for by the Model Law. a patent which would be infringed in case of importation of the said products into the said country. on attaining independence.217 Copyright has a special role in the context of development. racing against time in order to provide mass education by methods both formal and non-formal. to oblige the transferee to employ persons designated by the transferor not needed for the efficient transfer of the technology to which the contract relates. to restrict the transferee’s freedom to use. such facts shall be taken into account. to impose restrictions on research or technological development carried out by the transferee. in their countries.

Consequently. Law and Use design and implement development policies and plans. but also suitable protection for publishers. Once the law has been enacted. Objectives 3. advice and training for governments and organizations in developing countries.196 WIPO Intellectual Property Handbook: Policy.224 The objectives of WIPO’s cooperation for development program are achieved either directly. Incentives and subsidies are required for the purpose of encouraging national authorship both in a language in general use and in the local language. to enable him to devote his time and attention fully to the need for producing educational material. which enable them to enter into effective partnership with more developed countries and generally to take their place in the world. the infrastructure for its application has to be established. for the opportunity available to an author to have his works disseminated depends equally on the laws protecting publishers.220 In many developing countries. by facilitating their contacts with public and private bodies worldwide which can also thus assist them. Copyright protection involves ensuring not only payment of attractive and reasonable royalties to the authors. Protection of authors and creators both nationally and internationally calls for adequate legislation. in order to facilitate cultural interchange and the reciprocal flow of ideas. Also required is education of the public in the laws of copyright. there is a shortage of specialists in certain areas of knowledge. teaching material.219 It is indeed important that people be trained in a manner that is in keeping with their natural environment.221 Development of national authorship and creativity cannot be set in motion without guarantees to the author of adequate remuneration for his efforts.225 The major objectives of the cooperation for development program are to assist developing countries in: . A reasonable level of recourse to foreign works will continue to remain desirable. has to be created by authors originating in the community to which the works are addressed. by providing legal. artistic and scientific works. 3. 3. for which a special unit has been established in the WIPO Secretariat — to attain levels of socio-economic development through their intellectual property systems. practical and administrative information. emphasis had to be placed on the need to give an essentially national character to the training of the people. and the community has in turn to see and recognize its reflection in them. The Development Cooperation Program of WIPO Introduction 3. or indirectly. 3. including literary. 3.222 Developing countries may need to introduce such legislation also in order to protect the traditional manifestations of their culture which are the expression of their national identity.223 WIPO’s development cooperation aims to assist developing countries — including the least developed countries (LDCs). Progressively. 3.

genetic resources and folklore and.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 197 the establishment of intellectual property systems which are modern and function well. the development and adjustment of information technology. the use of traditional knowledge to benefit the holders of it. assistance to the Least Developed Countries (LDCs). the development of human resources in the context of the work of WIPO’s Worldwide Academy. 3. in particular by the use of the WIPO Global Information Network (WIPONET). in order to pool all available useful technological information resources at sub-regional and regional levels. the promotion of cooperation among developing countries. new approaches to traditional knowledge.227 In order to carry out activities to fulfil these aims. Its membership is open to any Member State of WIPO. 3. measures required to enable developing countries to benefit fully from the latest information technology.230 WIPO’s development cooperation activities in the field of intellectual property are aimed at helping developing countries in the following respects: . in both its legal and practical aspects.226 The creation and use of intellectual property through the setting up of innovation support structures and technology transfer. to direct Permanent Programs in the fields of both industrial property and copyright and related rights. 3.229 The Permanent Committee is a forum for debating policy and practice in intellectual property matters of particular concern to developing countries. in support of all these and other activities. among other things. The Permanent Committee will continue to meet biennially. the development of human resources. 3. the improved protection of expressions of folklore and the implications of electronic commerce. It has focused on all the new challenges described above (see at the beginning of this chapter the section on the Objectives of Developing Countries). the promotion of innovation in all fields of intellectual property to stimulate economic growth and culture. Development Cooperation in Relation to Intellectual Property 3. Its sessions have especially reviewed WIPO’s newer initiatives to help developing countries to meet those challenges: the major subjects of discussion have been.Chapter 3. as well as to intergovernmental and non-governmental organizations with observer status. to harmonize and enhance its intellectual property application worldwide. the adoption of timely and informed policies to meet existing and new intellectual property challenges such as the preservation. and with personnel adequately trained and using up-todate equipment. WIPO undertakes projects and activities tailored to the needs of particular groups of developing countries. with regard to legislation and administration. especially by the WIPO Worldwide Academy. the promotion and development of collective management of copyright and related rights (notably in connection with the development of a regional system). conservation and dissemination of biological diversity.228 A single Permanent Committee on Cooperation for Development Related to Intellectual Property was established in 1999.

3. providing legal advice and assistance in drafting new. In addition. officials of enforcement agencies such as police and customs. sub-regional and regional level in which government officials and other personnel from developing countries participate. promoting indigenous innovative. staff of research and development institutions. Training 3. using the technological information contained in patent documents. intellectual property legislation. in a number of developed and developing countries. establishing or strengthening intellectual property offices and other related institutions. . The International Bureau has already awarded fellowships for this purpose to university teachers from developing countries to enable such personnel to examine the course and curriculum content in order to introduce or strengthen teaching at the university level. of ministries of trade and foreign affairs and other persons dealing with questions related to intellectual property matters. for the collective training of government officials and others.198 WIPO Intellectual Property Handbook: Policy. and middle and senior level officials are sent on observation visits to such offices. Training activities occupy a preeminent place within WIPO’s development cooperation program because laws and institutions. Law and Use training of government officials and representatives of the private sector. government officials are attached to intellectual property offices and other institutions in developed or developing countries for practical training. 3. establishing programs for legislators and the judiciary. promoting awareness of intellectual property protection in local enterprises and educational institutions. or revising existing. such as lawyers.234 The aim of the training activities is to enable government officials and other personnel from developing countries to acquire knowledge and practice in the various aspects of intellectual property. however good they may be.232 Training programs have been extended to other categories of beneficiaries. workshops and other types of meeting at national. of enterprises and of collective management organizations.233 It is also desirable that the teaching of intellectual property law should be developed in a number of universities in developing countries. representatives of the judiciary. inventive and creative activities. 3. WIPO also organizes on-the-job training in some countries by international experts. This means a more intensive involvement in the training of trainers. so that they may effectively organize and administer the intellectual property system of their own countries. These categories include private lawyers and practitioners. The level of training ranges from basic. in addition to the government officials working in the national intellectual property administrations. and periodical seminars. introductory courses to refresher or specialization courses for officials in responsible positions in intellectual property administrations.231 WIPO’s training program consists of various regular general and specialized courses organized each year. agents and staff of collective management organizations working in the fields of copyright and related rights. are of little use without qualified staff to administer them.

in all cases. and in revising existing laws that are inadequate for the country’s economic needs and priorities. trademarks. assessment of staff requirements and training needs. the implementation of treaties. preparation of organigrams. there have been many instances of a growing interest. 3.Chapter 3. 3. The draft texts are then submitted to the authorities for study and comment. the implementation of licensing procedures for translation and reproduction licensing under the Berne Convention. WIPO has produced model laws or guides for developing countries dealing with such subjects as patents. in making intellectual property an effective tool in the development process. adherence to international treaties oblige countries to adapt their legislation in order to meet the protection requirements established in those treaties. It provides an important framework within which its industrial property system will function. . at the request of countries. WIPO experts are sent. and the protection of traditional knowledge and expressions of folklore. These texts are prepared by meetings of experts from developing countries and developed countries. WIPO comments on draft legislation prepared by the government or prepares draft legislation with due regard to the wishes of the government and the needs of the country concerned.236 For this reason.235 In recent years. and for that purpose suitable administrative machinery and procedures are required. In addition. in order to give on-the-spot advice. working on the basis of drafts prepared by the International Bureau and. 3.240 A law is not an end in itself for the country concerned.239 In addition. What follows is often an exchange of letters and visits between the authorities and WIPO experts to clarify and improve the texts. submitted to the States for their comments and subsequently adopted by meetings of governmental experts. WIPO has received many requests for advice in drafting intellectual property laws where they do not exist.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 199 Legal Advice and Assistance 3. Institutional Assistance 3. The law must be administered and used. industrial designs and industrial property licensing. Those wishes and needs would have been ascertained through consultations and surveys made on the spot by WIPO experts. streamlining and automation of procedures.238 Legal assistance is provided by the International Bureau of WIPO in two forms — the drafting of model laws and assistance in the drafting of national legislation. acquisition of appropriate equipment including computer hardware and software. 3. as well as assisting in participation in international cultural exchange. and the collection and distribution of their royalties. In the copyright and related rights fields. which undertake the safeguarding of the rights and interests of authors. The International Bureau has already drawn up a number of model laws for the use of developing countries. acquisition of the required technical documentation. copyright and related rights. on the part of governments of developing countries in various parts of the world. utilization of office space and the determination of suitable fee schedules. 3. WIPO has considerable expertise to offer governments and institutions.237 At the request of a government. and which also contribute to the promotion of education and culture.241 Here again. on such matters as the establishment. composers and performers. The existence of intellectual property laws suited to the needs of the country concerned is a precondition of an effective intellectual property system. establishment of links with external institutions. WIPO has paid special attention to the establishment and reinforcement of collective management systems.

In many countries. WIPO has established an award for inventors and innovators that is widely used by developing countries to encourage inventive activity. 3. public consciousness and use of the intellectual property system is stimulated. the award of prizes through competitions. and thereby to improvement in the quality of industrial output. by the provision of the necessary patent documentation and training in methods of retrieval and dissemination. depending on priorities and available resources. There is also the WIPO Trophy for Innovative Enterprises.247 One of the activities of WIPO in assisting the development process in developing countries is directed at improving access by those countries to the technological information contained in patent documents. Through mass participation in nationwide events and competitions. WIPO therefore organizes meetings which aim at building.200 WIPO Intellectual Property Handbook: Policy. the creation of national associations in the field. and by greater access to creations of foreign origin. including original works developed and used in the digital environment and related fields. devise ways and means of encouraging local entrepreneurs and enterprises. since 2001 two new Awards were added to the Awards program. Law and Use 3. economic and cultural development has long been recognized in developing countries. including creators and business circles. First.246 Following this. are unaware of the advantages the system has to offer and its role in the development process.244 As observed earlier. the WIPO Creativity Award gave due recognition to individuals or groups of individuals whose creativity. and how to use and protect intellectual property rights at the national level? Promotion of Indigenous Creativity. the provision of legal advice on protection procedures. for implementation over a period of time. what are its constituent elements. etc. innovations and inventions. more investment and effort in research and development (R&D) in technical fields. such administrative improvements and changes are planned. 3. Governments can. The protection afforded by intellectual property laws results in more creations. technological development and cultural development. artistic skills and imagination have resulted in original works. financial support and incentives. began in 1975. the role that the intellectual property system can play in technological. 3. Innovation and Inventiveness 3.242 Often. with the help of WIPO experts. 3. in an educational and cultural climate that promotes development in general.243 For an intellectual property administration system to be useful. now called the WIPO Patent Information Services for Developing Countries. how does intellectual property help trade. performances or productions connected with the field of copyright and related rights. to start with. One example is that since 1979. awareness of intellectual property by answering such basic questions as what is intellectual property.248 A program.245 Without a national intellectual property system. it must serve the public. which encourages enterprises and companies in all Member States to actively use the intellectual property system in their production and commercial activities. and in clubs in schools. the intellectual property system has not been used to full advantage partly because the public. Its aim is to provide free-of-charge patent information services to institutions in developing countries under agreements concluded between the International Bureau of WIPO and . by WIPO in consultation with the authorities concerned. leading to technological improvements. Use of Patent Information 3. public recognition of creators and inventors. it is difficult for a country to stimulate and protect the results of indigenous creativity and innovation.

However. through information made available on the Internet. The Small and Medium-Sized Enterprises (SMEs) Division. Research has shown that SMEs can and should contribute considerably to employment creation and trade. WIPO works to promote the exchange of experience and information among members of the judicial branch (judges of courts of all levels) so that they are better prepared to interpret and apply domestic laws and international treaties in the field of intellectual property law and to order measures that would prevent the continuation of infringement of intellectual property rights. This cooperation may take the form of national and regional seminars and study trips. Programs for Legislators and the Judiciary 3.249 WIPO gives assistance and advice.255 WIPO has already been active in raising awareness of the value of the intellectual property system in higher education. seeks to raise awareness of the relevance of intellectual property for small business and promotes initiatives to make the intellectual property system more accessible. and find solutions to such needs.The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 201 contributing industrial property offices in some 20 countries (both industrialized and developing countries). 3. Such centers may be created within an existing or planned industrial property office. SMEs need to be encouraged to take full advantage of the existing intellectual property protection system in order to compete more successfully in the global economy. regional and national seminars organized by WIPO. 3. and is the executing agency for several UNDP projects. These include international.251 In addition. 3. It has also been shown that.254 One of the priorities of this program is to raise awareness of the potential benefits for SMEs so that they effectively use this system. which ultimately promote economic growth. when engaged in the adaptation of their intellectual property legislations to the changing economic and technological situation. SMEs are innovative and competitive.253 The activities carried out by the SMEs Division of WIPO recognize the important role played by such enterprises in strengthening the economic wellbeing of a country. less cumbersome and more affordable for SMEs. 3. Such cooperation may also take the form of national and regional seminars. for SMEs themselves. given the opportunity.Chapter 3. or within a scientific and technological information center.252 It is increasingly recognized that efficient use of the intellectual property protection system can significantly contribute to economic growth. 3. The awareness-building activities are for government institutions responsible for SMEs. through cooperation activities with universities and similar institutions .250 WIPO cooperates in promoting the exchange of experience and other information among legislators so that they are better prepared to consider the needs of their own countries. simulated trials and study trips. both on the domestic level and in international relations. distance learning courses offered by the WIPO Worldwide Academy and joint activities in cooperation with other international or regional organizations or institutions which deal with matters concerning SMEs. concerning the planning and establishment of patent information and documentation centers which serve the needs of national or regional institutions in developing countries. Promotion of Awareness in Local Enterprises and Educational Institutions 3. established in October 2000 following unanimous support by WIPO’s General Assembly. other institutions supporting SMEs and.

259 The Professional Training Program offers intermediate and advanced training courses for managers and technical staff of intellectual property offices and other professional users of the system. These sessions are also designed to provide a forum for sharing information and exchanging views on the experience of other countries in using the intellectual property system as a tool for development. policy advisers. the demand for tailor-made programs has continued to increase steadily.256 The WIPO Worldwide Academy (WWA) was established in March 1998. 3. a Master Course joint degree on intellectual property with the University of Turin (Italy) and the qualification of Master of Intellectual Property Law and Human .261 The Distance Learning Program is an advance in teaching methodology. These courses are not only for persons working in intellectual property offices. but also for those involved with research work in universities and Research and Development (R&D) institutions.257 Owing to the rising level of activities related to intellectual property in member countries. 3. the Academy carries out its programs both at its Headquarters in Geneva. In addition to a General Course on Intellectual Property. training and research services in intellectual property. particularly for developing countries. The WIPO Worldwide Academy 3. development managers. five specialized advanced distance learning courses which focus on specific aspects of intellectual property are to be launched. Law and Use to include intellectual property in teaching programs. In order to meet its objectives. cost effectiveness and the capacity to reach the unreached.202 WIPO Intellectual Property Handbook: Policy. the Academy organizes sessions for decision-makers. Distance learning courses are a complement to traditional training methods. diplomats and other groups. These courses are delivered via the Internet. 3. In addition. with the attendant advantages of flexibility of time and space. the Academy expanded the scope of its training programs in 2000 to include courses and seminars on the legislative.260 Under the Policy Training Program. student-teacher interaction. In response. administrative and enforcement aspects of intellectual property systems. such as strengthening the teaching of intellectual property for professors and the enforcement of intellectual property rights for the judiciary. 3.258 The programs of the WWA comprise three main categories. student tests and course monitoring and evaluation systems. and cooperates with several academic institutions and intellectual property offices. special Academy sessions are organized for specific interest groups and also to deal with special or topical issues. to promote policy debate and a deeper understanding of the practical implications of the intellectual property system. It is WIPO’s central coordinating institution for human resources development. as well as a means of increasing the range of training beneficiaries. such as an intellectual property law program with the University of South Africa (South Africa). as well as for those in chambers of commerce and industry. and in different parts of the world. using a format that allows for online registration. Policy Training and Distance Learning. The overall objective of the Academy is to serve as an educational institution providing teaching. 3. namely.262 The Academy also organizes diploma programs on intellectual property law in cooperation with universities and other institutions. A number of cooperation agreements have been concluded with universities and regional training centers towards this aim (see under the WIPO Academy below). Professional Training. 3.

That Center is the catalyst of WIPO's knowledge management initiatives and incorporates the WIPO Library. which specializes in intellectual property matters and is designed to support the research and information needs of WIPO and UPOV staff. Britannica Online and Lexis-Nexis are available through the reading room services of the Library. students of the WWA and external researchers. Databases like Proquest.Chapter 3.000 monographs and nearly 300 periodicals. Oxford Reference.263 The WWA works closely with the WIPO Knowledge Management Center and e-Library. Its collection is enriched by a number of electronic journals and electronic books and is completed by electronic resources (most of them acquired under a United Nations inter-agency consortium agreement). University of Lund (Sweden). 3. .The Role of Intellectual Property in Development and WIPO's Development Cooperation Program 203 Rights with the Raoul Wallenberg Institute of Human Rights and Humanitarian Law. It has approximately 35.

Law and Use .204 WIPO Intellectual Property Handbook: Policy.

Chapter 4 Enforcement of Intellectual Property Rights Enforcement of Industrial Property Rights. Copyright and Related Rights Introduction Enforcement of Industrial Property Rights in General Enforcement of Patent Rights Enforcement of Copyright and Related Rights Activities within WIPO Concerning Enforcement Enforcement Provisions of the TRIPS Agreement Intellectual Property Litigation Introduction Review of Industrial Property Office Decisions Infringement Actions Remedies Arbitration and Mediation of Intellectual Property Disputes Alternative Dispute Resolution Enforcement in the International Context WIPO Arbitration and Mediation Center WIPO Internet Domain Name Dispute Resolution .

206 WIPO Intellectual Property Handbook: Policy. Law and Use .

4 A company affected by another’s right will carefully assess what its scope is and whether or not it is valid. If he becomes aware of an apparent infringement he should not necessarily assume that the infringement is deliberate (though if the infringing item is an exact copy or counterfeit. 4. Similar arguments can apply to other rights such as trademarks and designs.2 All intellectual property systems need to be underpinned by a strong judicial system for dealing with both civil and criminal offenses.Enforcement of Intellectual Property Rights 207 Enforcement of Industrial Property Rights. or provides his services. They must clearly distinguish the protected subject matter from the prior art and must be neither overcovetous nor too modest. This highlights a point of particular importance to the owners of patents. There is no point in establishing a detailed and comprehensive system for protecting intellectual property rights and disseminating information concerning them. They must also be able to call on the state authorities to deal with counterfeits. by inventing around the protected area in the case of an earlier patent. an intellectual property system will have no value. namely that claims must be well drafted and properly supported by the disclosure of the invention. 4. if it is not possible for the right-owners to enforce their rights effectively in a world where expanding technologies have facilitated infringement of protected rights to a hitherto unprecedented extent. Another approach is to seek a license or to negotiate some other agreement in a friendly way.1 Accessible. This normally means that the terms of any license must not contain anti-competitive or unreasonable provisions. In coming to agreements with competitors.Chapter 4 . Copyright and Related Rights Introduction General 4. Without a proper system for both enforcing rights and also enabling the grant of rights to others to be resisted. 4. He must keep an eye on the industrial and commercial markets in which he sells his products. A well drafted patent will often be enough in itself to deter potential infringers. He must keep abreast of his competitor’s activities. Avoiding Litigation 4. companies must be careful not to contravene competition policy rules aimed at avoiding distortion of competition. staffed by an adequate number of judges with suitable background and experience. of course. for example threatening a court action when there is no ground for alleging infringement or when the right . He should first contact the competitor to point out the existence of his right. Laws in a number of countries concerning patents.3 A competitor whose operations are obstructed by earlier rights will usually seek to avoid or overcome the problem in a legitimate way. designs and trademarks.5 It is up to a right-owner to act as his own policeman. Intellectual property disputes are in the main matters to be decided under civil law and the judicial system should make every effort to deal with them not only fairly but also expeditiously. or in which his processes might be used. provide that a rightowner may not make groundless threats against competitors or their distributors.g. e. infringement will almost certainly have been deliberate). sufficient and adequately funded arrangements for the protection of rights are crucial in any worthwhile intellectual property system. They must be able to take action against infringers in order to prevent further infringement and recover the losses incurred from any actual infringement.

However. .10 The first opportunity that others. In negotiation. 18 months after the priority date. Enterprises.7 Industrial property offices frequently have quasi-judicial functions in the administration of industrial property systems. Enforcement of Industrial Property Rights in General Action Before an Industrial Property Office 4.8 The expression “opposition” may be construed widely. speedy and inexpensive matter. the State cannot guarantee that the rights which it grants are valid — there is always the possibility that a prior right has been overlooked or a specification misunderstood. since these rights in the great majority of jurisdictions arise automatically on the creation of the protected work. Thus many systems provide that opposition can be considered by the national industrial property office acting in a quasi-judicial role. 4. which makes it all the more likely that rights might be granted in conflict with earlier rights. and provide a forum for procedures for contesting rights under consideration or granted by the office.9 Why do States provide for opposition? With even the most rigorous examination system.6 Negotiation is an important aspect of protecting and enforcing rights. as well as by courts. for instance by scrutinizing patent office journals and published applications. but he can send a simple letter drawing attention to the right so that the infringer cannot subsequently argue ignorance. an infringer might well be persuaded to change what he is doing. Pre-grant opposition is invariably before the office. It may well be worth suggesting that the services of a mediator be used or that the issue should be decided by arbitration. handled as early as possible in the life of the right. Many systems are not particularly rigorous. is at the first publication stage. 4. as referring to all possibilities open to third parties to intervene before the industrial property office both in proceedings leading to the grant of a right and in proceedings for contesting the grant after it has occurred. Not only is it important to know if competitors are seeking to protect developments which come within the scope of one’s own patents. but it is also important to be warned if they are seeking to protect known technology or technology patented by others. Thus the owners of earlier rights must be able to object at some stage. The possibility of opposition rarely arises in relation to copyright and related rights. 4. have to become aware that a patent which could affect their business is being applied for. Of course.208 WIPO Intellectual Property Handbook: Policy. the supposed infringer may claim that he is not infringing. and in particular on patent applications made in their areas of interest. Those procedures are often referred to as opposition procedures. During the attempts to negotiate. opposition should be a relatively straightforward. published with the application. One can also learn from the search report. should keep their eye on the activities of competitors and what is happening in the marketplace. or he may argue against the proposed license terms. of the prior art which will be considered at the examination stage. because the registration can be disputed. particularly those which own patents. 4. both sides need to agree to accept an arbitrator’s decision and a contract to that effect may be needed. or he may allege that the right is of little value and does not justify significant royalties. The possibilities for opposition arise particularly in relation to registrable rights such as patents and trademarks. in everyone’s interests. Law and Use relied upon has expired. for example competitor enterprises producing goods of the same character as those covered by the patent application. This could of course be before a court.

Enforcement of Intellectual Property Rights 209 4.17 As for registered designs. circumstances can and do arise where the owner of a right feels that he must take action against an infringer in order to protect his markets. Reexamination may result in refusal or in a more tightly drafted patent. 4. 4. and as to whether the alleged infringement actually falls within the valid scope. probably because there is a rigorous examination involving search of earlier rights. The problem with such pre-grant opposition is that there is often very considerable delay in achieving a grant.Chapter 4 . where there is no provision for pre-registration opposition. Trademarks are published in the form in which they are to be registered. to the attention of the examiner. such as France. In such situations. there is no provision for opposition. in many countries it is possible for an aggrieved party to apply to the office for removal of the mark from the register. interested parties may seek cancellation of registrations by the office. 4.11 Some systems allow for formal opposition before the grant of the patent or an opportunity for third parties to become a party in arguments about whether or not the patent should or should not be granted. there are few oppositions of trademarks. One of the main grounds for this would be non-use of the mark. there are more oppositions because there is no official search against prior rights during examination. and a short period is allowed for opposition. Most patent infringements are not slavish imitations but. In most jurisdictions this will be handled in the civil courts. there will be considerable dispute as to whether for example the claims in a patent to be enforced should be of the scope claimed. In the United Kingdom. which may have been overlooked in the first examination. Infringers may genuinely believe that they have a plausible case on such aspects. 4. However.14 In many countries there is no provision at all for opposition because the industrial property office lacks the expertise. such as the United States. .16 After registration of a trademark. take advantage of the protected inventive concepts of the patent and will have to be resolved on the basis of expert opinion. 4. so opposition is the only way in which the owner of an earlier trademark can induce the industrial property office to take account of this earlier right. but may draw prior art. Such parties do not become direct parties to the procedure. In general. In other countries. In most situations. considerations are much more straightforward than those for patents and procedures can be much more rapid. Delay means that a patentee who needs a granted patent in order to pursue an infringement could not settle an action against the infringer quickly. If too long a delay occurs.13 In some countries. the user of the later patent might argue that the owner of the earlier one has acquiesced in the grant of the later one and as a result should not be allowed to take action. This might make it difficult to enforce the earlier patent against products or processes covered by the later one. where no substantive examination is carried out.18 Despite efforts to achieve friendly settlement. third parties concerned about a granted patent can ask for it to be re-examined by the patent office.12 It can be important to bring post-grant opposition proceedings in good time. This can be the case in those countries. present or future. or to seek its modification.15 Many countries provide for pre-registration opposition to trademark registration. With trademarks. arguably. for example Germany. 4. revocation before the courts is the only possibility for securing cancellation or amendment of a competitor’s patent. Civil Court Procedures 4. arguments also concern the scope of the registration and whether the allegedly infringing mark is confusingly similar to the earlier mark.

on the one hand stating the material facts of the claim and on the other the defenses or counterclaims.) forthwith. as well as damages. but the serious criminal offenses of counterfeiting and piracy can also arise. The defendant will usually acknowledge the writ and give notice that he intends to defend. as plaintiff. 4. As an alternative to damages. Almost always. which take the form of written questions which the other side must answer under oath. Once the pleadings have been completed the plaintiff will issue a summons for directions. Also counterfeits may be detected by law enforcement officers who are specifically empowered under trademark legislation to take action against traders in counterfeit goods.19 In an action for patent infringement in common-law countries (the procedure and terminology in civil-law countries differs to some extent). On conviction. the judge can make various awards. traders in counterfeit goods can face stiff penalties.21 Cases involving complex technology can take a very long time in court with expert witnesses being called and subjected to examination and cross-examination by both sides. A trader may knowingly manufacture. arranges for a writ or complaint to be served on the alleged infringer. effort and expense. In addition to injunctions. Finally. In respect of items protected by copyright. e. In the writ the patent owner. will specify the nature of the alleged infringement and the remedy sought. 4. such as sound recordings on tape or compact disk. by sworn affidavit.g. an injunction restraining the alleged infringer. this will have to be defended by the patent owner. patent actions are essentially civil actions for infringement.210 WIPO Intellectual Property Handbook: Policy. An order requiring the defendant to deliver up to the patent owner. any products or articles incorporating the patented invention can also be made. the patent owner. before the trial. Their powers may be extended to enable them to deal with copyright offenses. the court may also award damages in respect of the infringement. Criminal Actions: Counterfeiting 4. and seizure of all offending products is normal. distribute or sell goods marked with a trademark where the marking has been done without the permission of the owner or where the goods have been illicitly copied. the plaintiff may be entitled to a final or interlocutory ruling (one which decides the issue but leaves open the question of damages. They go back and forth and can take several months.22 As already mentioned. namely compensation for sales and markets lost as a result of the infringing activity. 4. Rightowners themselves may become aware of distributors or retailers trading in counterfeit goods and bring the trade to the attention of the police. the patent owner can secure a declaration that the patent is valid and infringed. acting through his immediate lawyers (solicitors). All the profits derived by the defendant as a result of the infringement may be surrendered to the patent owner. much of what has been explained about procedures in relation to civil actions applies to ordinary actions for infringement. the police are the normal enforcement authority and will take . Such directions. If the defendant does defend. will deal with discovery and inspection of documents and in general with the trial preparations. pleadings will be exchanged. In the case of trademarks and copyright. or to destroy. etc. A counterclaim may be an allegation that the patent is invalid. The purpose of pleadings is to define precisely the issues in dispute and eliminate agreed or irrelevant matters. the owner of the patent can be awarded an account of profits. and the rest are settled along the way.20 It is noteworthy that only a small minority of cases actually get to the trial stage. Law and Use 4. will be requested. In issuing his reasoned decision. So may interrogatories. and the issue is not settled out of court or dealt with summarily. for reasons of time. from continuing with what he has been doing. Notice to inspect documents may be served on the other side by leave of the court. given by the judge. If he does not.23 There are several ways that counterfeits can come to the attention of the authorities. the defendant.

he can alert the customs authorities. Even where the patentee has some idea of the exclusive right granted to him in his own country.27 Most inventors use the services of a patent attorney to write the specification for them. it is very rare for him to know with any precision what rights he may have in corresponding patents in other jurisdictions. and particularly may have difficulties in understanding the claims. Enforcement of Patent Rights 4. Application is made to the court to stop the unauthorized manufacture. usually to prevent the manufacture.Enforcement of Intellectual Property Rights 211 action on the basis of a complaint by the lawful right-owner. but instead tries to deal with the objection by argument. a patentee must first assess what he has patented. 4.25 In most systems. In practice. An inventor may not fully understand the specification.26 When thinking about patent enforcement. but does not infringe the patent. which may be subject to restrictions for other reasons such as security or public health. permission to practice the patented invention.Chapter 4 .29 Having assessed the scope of the patent right. It is not. so that the court may grant the appropriate order and stop the infringement. The inventor will normally try to avoid any modification which will result in a limitation of the scope of protection. Action can then be taken against the importer. as many people think. Evaluating Validity and Infringement of a Patent 4. They often need little more than 24 hours’ warning in order to secure warrants and make checks. a patent is the right enforceable in a court. The specification or the description and drawings may be used to interpret the claims. 4. then the patent may be of limited commercial value. who will keep watch for the goods and impound them when they arrive.24 Another way in which action against counterfeit goods can be taken occurs at ports of entry of imports. which must be fully supported by them. Assessing the Scope of Patent Rights 4. It is now a feature of just about all patent systems that a patent must include either a specification containing claims or a description. the next task is for the patentee to decide if there is infringement. sale and use of a patented invention. however. In most systems. as they define the scope of protection sought and eventually granted through the patent. for any reduction in the scope of protection makes it easier for a competitor to avoid infringement. Before committing himself to the financial risk of a patent case — which can . The examination process in the Patent Office can modify the original wording. If a mark owner becomes aware that consignments of counterfeit goods are on their way to the country. Patent Office examiners should try to remember this when an applicant for a patent steadfastly resists amending his claims in order to overcome an objection. it may also lead to a patent right of doubtful commercial utility. the claims are decisive. If a competitor can easily supply the market with something that is equivalent to the invention. The patentee’s first real understanding of the extent of his patent rights often only comes to him when he is considering enforcement. the process is less straightforward than it sounds. 4. claims or any required drawings (depending on the terminology of the particular law).28 Thus the basis for enforcement of patent rights is established at the start of the patenting process when the patent specification is written by the inventor or the inventor’s patent attorney. sale or use of the invention. While acceding to an amendment might lead to the early grant of a patent on the application.

the claim included a feature which defined what was happening within the torch when it was operated. no patent system guarantees the validity of a granted patent. based on the example above.33 Frequently. In others.” If the allegedly infringing device does not include a spring. In a patent enforcement action. depending on the way in which their law has developed the procedure for the definition of an invention. is almost always the wording of the claims. the task of the court in the determination of infringement is the assessment of the scope of protection defined by the patent and whether the alleged infringement falls within that assessed scope. A better means of evaluation is thermal imaging. it is normally considered that a patent which can be shown to be invalid cannot be enforceable. that a rubber tube can be considered to fall within the term. often in the form of a counterclaim. This being the case. such as. and the resolution of the technical points of dispute may not only involve one or more expert witnesses. therefore. In addition. the claim may include as a feature “a spring. but may need experimental evidence as well. and consider whether the evidence produced by the defendant renders the patent invalid with respect to. 4.32 As already stated. however. like other forms of intellectual property. For example.30 The issue of infringement is very rarely considered on its own. 4. the issues of infringement and validity are heard together. the position of the patentee during patent enforcement proceedings tends to deteriorate as a defendant makes searches and often finds evidence which is relevant to validity. in a case concerning the alleged infringement of a patent granted for an invention consisting of an air plasma cutting torch. a defendant will usually add to any defense of non-infringement a further defense. Different issues will almost always arise in these two assessments. the court (or whatever tribunal is considering validity) should take the same scope of protection as has been defined for the purposes of infringement. In the determination of validity. The starting point for both. do not only affect the parties to a dispute.” 4. 4. there will be a problem as to whether the actual wording of the claims. For instance. defines an invention which includes the allegedly infringing subject matter. unless he is very wealthy and relaxed about money. “spring.31 Because of the principle that no invalid patent should be enforceable. they have an effect on the public at large.212 WIPO Intellectual Property Handbook: Policy. if necessary interpreted in light of the specification (or the description and any drawings). can that be infringement? Different jurisdictions may handle this kind of question differently. 4. the defendant in a patent action is usually allowed to bring in evidence of invalidity at any stage of the proceedings. Patents. To prove infringement. In spite of the examination of patent applications during prosecution. As a result. and in some jurisdictions even during the trial itself. an experiment was necessary to define the temperature gradient of the plasmagenic air within the torch itself. must make some attempt to forecast whether he can be successful. In some jurisdictions. No sooner has one side carried out experiments. the question of validity is heard separately by a different court or it may be referred to the Patent Office. the scope of protection claimed by the patentee. than the other side may feel obliged to carry out experiments themselves to check the worth of the first set of experiments or with the aim of disproving the first experiments. . but instead has a solid rubber tube which in some respects acts like a spring. but it is expensive to set up. Law and Use be among the most time-consuming and expensive of all forms of litigation — a patentee. and to the extent of. which in turn will affect the temperature gradient. many courts require or expect the assistance of an expert to give guidance as to the technical merit of an argument. A probe inserted into the torch has the effect of modifying the air flow through the torch. that the patent is invalid and hence not enforceable even if infringed.34 The technical content in many patent cases can be very complex indeed.

worldwide business. However carefully one makes an estimate of the costs at the start of the litigation. including works and productions protected by copyright and related rights. and most disputes are because of their high cost. the parties to a patent dispute will find themselves involved in lengthy consideration of the issues and preparation of material for the court.Enforcement of Intellectual Property Rights 213 4. it may be that the defendant can show that it was known before the date of the patent to use a member having elastic properties in some respects similar to a spring. trade in products embodying protected intellectual property rights is now a booming. and that exercise needs to be carried out for all the claims. or defense against enforcement. most recently. Using the “spring” example given above. or a combination of both. which in turn are supported by expert evidence and experimental evidence. occurs because someone wishes to receive a commercial advantage. But most patents contain more than one claim. the patentee may still succeed in restraining infringement if it is held that another claim is valid and an infringement has occurred with respect thereto. Where the patent dispute occurs in a field of high commercial value.39 The evolution of international standards for the enforcement of copyright and related rights has been dramatic in recent years. Enforcement of Copyright and Related Rights Introduction 4. the advent of digital technology. which makes it possible to transmit and make perfect copies of any information existing in digital form. to make money. The first is the advance of technological means for the creation and use (both authorized and unauthorized) of protected material. however peripheral. the court will have to consider each claim separately to see if it is infringed.35 Assisted by arguments. It is mainly the borderline cases that go to trial. The inclusion of a number of claims is to give the patentee extra chances of preventing an infringement. they almost invariably have to be revised upwards as new issues come to light during the development of the case. . the parties may be inclined to drag any point into the dispute. This has the effect of extending the arguments by which each side hopes to secure a decision in its favor. 4. and this evolution has been driven principally by two factors.Chapter 4 . As with the determination of infringement.38 This is really the key point about patent enforcement. The costs arising from all of this can become outrageous. including.36 Similar expert evidence and experiments may be needed in order to deal with validity. simply put. If one claim is held invalid. 4. The Cost of Patent Litigation 4.37 Whether the submission and evidence concerning infringement and validity are made in writing or given orally at a hearing. Patent enforcement. The second factor is the increasing economic importance of goods and services protected by intellectual property rights in the realm of international trade. the court will need to decide whether the known information is sufficient to invalidate the claims. That advantage must constantly be reviewed against the cost of the litigation. if it appears to help their case. Where the patent in suit has a number of claims with respect to which the patentee alleges an infringement. the court will reach a conclusion about whether or not an infringement has occurred. in other words.

WIPO has devoted ever greater attention to questions relating to the enforcement of rights. 4. on the one hand Article 16(1) and (2). which provides that infringing copies of a work are subject to seizure in any country of the Berne Union where the work enjoys protection. A short list is illustrative: two WIPO Worldwide Forums on Piracy were held in 1981 and 1983. including the activities of WIPO. evolution of new standards for enforcement of rights has taken place in a number of contexts. Article 3 of the Convention leaves the implementation to the Contracting States. unfair competition or penal sanctions. which began in 1991. which began in 1993. which were included by reference in the draft WIPO Model Law on Copyright prepared by the International Bureau and discussed by a Committee of Experts in 1989 and 1990. Article 36(1) of the Berne Convention provides that “Any country party to this Convention undertakes to adopt.44 The experience gained in all of the above activities since the 1980s has been reflected in the work of a Committee of Experts towards development of a Protocol to the Berne Convention. paragraph (2) of the same Article provides that “It is understood that. extensive and detailed recommendations for measures to combat piracy of audiovisual works. It has become obvious that such provisions alone do not provide national governments with the necessary guidance concerning appropriate and modern standards for the enforcement of rights. . it will be in a position under its domestic law to give effect to the provisions of this Convention. Rome and Phonograms Conventions cannot be respected without appropriate measures for the enforcement of rights provided under the national laws of their member States. a committee of experts was convened in 1988 to elaborate measures against both piracy and counterfeiting. and on the development of a possible international instrument on the protection of the rights of performers and producers of phonograms. the obligation of States to provide adequate means for enforcement of rights is clearly present in these conventions. For example. Thus. Rome and Phonograms Conventions also contain provisions indirectly requiring appropriate enforcement measures in any country party to the conventions.40 While the international copyright and related rights conventions administered by WIPO do not contain extensive provisions dealing with enforcement of rights.42 It is obvious that the above provisions of the Berne. contained proposed sanctions against the abuse of technical means applied for the protection of copyright. even when the copies come from a country where the work is not or no longer protected.41 The Berne. in addition to provisions on conservatory measures. a detailed chapter on enforcement of rights was included in a draft WIPO Model Law on the Protection of Producers of Sound Recordings considered by a Committee of Experts in 1992. which provides for seizure of copies of certain recordings of musical works imported without permission of the author or other owner of copyright in the country of importation. Article 2 of the Phonograms Convention obligates each Contracting State to protect producers of phonograms against the making of duplicates (copies) without the consent of the producers and against the importation and distribution of such duplicates.43 Since the beginning of the 1980s. in accordance with its constitution. phonograms and the printed word were developed in the series of meetings on categories of works (1986 to 1988). The Berne Convention contains two specific provisions on the enforcement of rights. civil remedies and criminal sanctions.” Similar provisions are found in Article 26(1) and (2) of the Rome Convention.214 WIPO Intellectual Property Handbook: Policy. at the time a country becomes bound by this Convention. which may choose one or more of the following: copyright or other specific (“related” or “neighboring”) rights. which. and on the other hand Article 13(3). Evolution of International Standards for the Enforcement of Rights 4. 4. 4. Law and Use Provisions on Enforcement of Rights in International Copyright and Related Rights Conventions 4. the measures necessary to ensure the application of this Convention”.

systems containing technical devices that either entirely prevent the making of copies or render the quality of the copies made so poor that they are unusable.49 In certain cases. courts must be able to order the search. 4. Such remedies should always be available irrespective of whether the infringement has been committed willfully and/or for profit-making purposes. These measures must be available on an ex parte basis where giving the defendant prior notice would be counterproductive. The most important objectives of such measures are the prevention of acts of infringement and the seizure of infringing copies. or the continuation of the committing. These deliberations were part of a process leading to a Diplomatic Conference in 1996.48 Civil remedies are not always sufficient deterrents. Where such devices are manufactured or imported and distributed unlawfully. those works. packaging materials. accounts or business papers relating to such copies. .45 The availability of appropriate provisional (conservatory) measures is an indispensable element of any efficient mechanism for the enforcement of copyright. the closing down of one plant with the assistance of courts and law enforcement authorities may only mean that the plant will re-open somewhere else. courts should be able to impose both these sanctions on the infringer.Enforcement of Intellectual Property Rights 215 Naturally. National Legislation Concerning Enforcement of Rights 4. both contain provisions on the enforcement of rights. which resulted in the adoption of the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty. because it may be difficult to prove that infringements are committed willfully. Such activities are violations of the protected rights and should be sanctioned in a way similar to that of other kinds of infringements. It is normally preferable that criminal sanctions are also applicable in case of infringements committed through gross negligence. implements for the making of such copies and documents. reproducing equipment and other implements that could be used for (further) infringements. of infringements. Technical devices are also used to prevent the reception of encrypted commercial television programs except with the help of decoders. Infringements committed willfully and for profit-making purposes should be punished by criminal sanctions.47 The purposes of civil remedies are (i) to provide compensation for the prejudice caused by infringements. the only practical means of preventing copying is through so-called “copyprotection” or “copy-management systems”. that is. where merited by the case.Chapter 4 . it is technically possible to make devices by means of which copy-protection and copy-management systems as well as encryption systems may — although illegally — be circumvented. (ii) to dispose appropriately of the infringing copies (typically through destruction or other disposal outside the normal channels of commerce). or other owners of copyright in. The criminal sanctions available should comprise both fines and imprisonment. Where infringement becomes a business. it should be possible for right-owners to be granted temporary preliminary injunctions to prohibit the committing.46 In particular. and. for profit-making purposes. 4. the normal exploitation of the works is undermined and may cause serious prejudice to the authors of. Also. However. constitute essential evidence and could disappear if not brought under the control of the court. Increased punishments in cases of recidivism are also justified. 4. which would-be viewers have to buy or rent. 4. dealt with in chapter 5. and the level of the sanctions must make it clear that such infringements of copyright are serious offenses. temporary seizure and temporary impounding of suspected unauthorized copies of works and other protected subject matter. (iii) to dispose appropriately of implements used for infringing activities and (iv) to grant injunctions to prohibit further infringements. provisions on enforcement of rights have figured prominently in the discussions of both Committees.

The use of the notion “piracy” in the following covers all three kinds of infringements now mentioned. costly or burdensome.” “bootlegs” and “pirate copies. for instance. “Pirate copies. five categories of works.54 Generally speaking. the World Customs Organization has developed a model law for the enforcement of such measures. Anti-Piracy Measures for Phonograms. For example.e.53 The notion of piracy covers a number of different phenomena. Those are becoming rarer because in general people prefer recordings of higher quality. equitable. in the field of music. often on the other side of the world. . three expressions are used in common parlance which are all covered by the wider notion of piracy as used here. Border measures are usually carried out by administrative authorities (customs authorities) and not by judicial authorities. a number of safeguards and appropriate procedural rules are normally found which ensure the fairness and effectiveness of measures applied by such authorities. The copies could be either tapes or — more sophisticated — industrially manufactured CDs. with vast quantities of infringing copies being manufactured in one country and shipped to others. Much attention has been given to this subject: Articles 51 to 60 of the TRIPS Agreement (see chapter 5 below) deal with border measures. if the recording was made without the authorization of the right-owner concerned. national legislation must ensure that procedures for the enforcement of copyright are fair. 4.. It is. Audiovisual Works and Computer Programs 4. because it is frequently easier to prevent the distribution of infringing copies at the border than after the copies have already been brought into the country and put into circulation. i. and investment in recording and producing local talent virtually dries up. “Bootlegs” are copies of recordings of a live performance or a broadcast. Those expressions are “counterfeits.” finally.216 WIPO Intellectual Property Handbook: Policy. For this reason. and both plaintiffs and defendants must have equal access to information and equal possibilities to present their case. exactly the same packaging as the original. video recordings. etc.52 Providing for the availability of various enforcement measures may not be entirely sufficient. namely: sound recordings. 4. In national legislation on this issue. the power to stop infringing copies entering a market is of vital importance.51 Border measures are intended to prevent infringing copies — or lawful copies in violation of the right of importation — from being brought into the country concerned.” “Counterfeits” are usually exact copies of a sound or video disc or tape with. necessary that national legislation also provide general safeguards to ensure due procedures for the application of those measures in keeping with the principles of justice and fairness and with the need for efficiency. expeditious. quantities of infringing copies which are shipped to other countries substantially undermine legitimate business to the extent that international companies often withdraw from the market. with handwritten labels. They constitute an effective way to counter acts of infringement. and do not impose unreasonable time limits. Law and Use Border Measures 4. the production in a country of infringing copies for sale in that country. For example. performances or productions are the most exposed victims of piracy. not unnecessarily complicated. transparent. 4.50 Piracy is by no means an exclusively national activity. of course. Also. It is also very much an international operation. are unauthorized copies of a sound or video recording which do not attempt to imitate the original but are generally of low quality. and provisions that make this possible are an essential feature of modern copyright legislation. usually including even the trademark.

it is said that there are more urgent priorities in society than combating piracy. of computer programs of the same quality as the original and with high speed and efficiency. is. by means of a personal computer. broadcasters and others suffer considerable economic loss. This is detrimental not only to the personal economic interests of the beneficiaries but also to society as a whole because it hampers creativity and is contrary to the interests which copyright law is there to serve. very easy to copy.58 It should be noted that piracy generally hurts the most those productions which are successful.Chapter 4 . something which is.59 The reasons for fighting piracy should be seen both in a short and a long-term perspective. that is.60 Various practical measures can be undertaken in order to combat piracy. as computer programs are very costly to develop. which means that authors. if it is easy for users to contact and obtain authorization from the rightowners through such an organization. 4. books. the basic approach in most countries. they are the only ones which are of interest for pirates. uncontrolled copying hurts considerably the interests of the right-owners. It is sometimes said that piracy is not a bad phenomenon because it supplies the market with popular products at low prices. the basic possibility for him is to take civil action. including that of establishing domestic cultural industries. with modern digital reproduction technology. Also. . that mechanisms (“spoiler signals” or “water marks” in sound or video recordings) are built in which prevent unauthorized copying.61 The system of copyright and related rights is a branch of private law in that it grants personal exclusive rights to the individual beneficiaries. performers and phonogram and videogram producers. 4. broadcasts. It takes. Occasionally it is added that the pirates employ a considerable workforce and thus give increased job opportunities. To some extent protection can be obtained through various types of copy-protection systems. no great effort to make copies. in the long run. Another measure is to have an efficient collective administration in respect of musical works. naturally.55 Particularly the first three categories of works or productions have been hit by piracy in recent decades because they are. detrimental to the interests of consumers and of society as a whole. 4. the industry may not be able to continue those productions and the output will be qualitatively lower. information and entertainment. If this incentive is lost. that it is for the injured party himself to take action. or has been.57 The first and perhaps most important reason is that the rights under copyright law are violated. Anti-piracy Measures 4. publishers. for instance. the temptation to engage in piracy activities may be less.Enforcement of Intellectual Property Rights 217 - computer programs. Consequently. These arguments are. not valid if a State wants to maintain its international reputation and participate in the international exchange of culture. In the phonographic industry only a small proportion of the productions are economically successful and it is the income from those that makes it possible for the industry to support less successful but perhaps more valuable productions. Reasons for Taking Action Against Piracy 4.56 There are several reasons for a State to take efficient measures against piracy activities. Therefore. 4. 4.

there is a change in the attitude in many countries. the so-called subjective criteria must be determined clearly. in short. Also. and their packaging. for loss of market share for the work. for instance by providing equipment used for unauthorized reproduction with full knowledge of the intended use of that equipment. He should also be compensated.62 However. be either destroyed or surrendered to the injured party. it is important that action is taken to prevent those copies. In many national laws there are. otherwise. Alternatively. A number of countries have introduced heavy penal sanctions for at least certain kinds of infringement of copyright. Under most laws the . in particular. The sanctions should be applicable not only to the person who directly committed the violation but also to those who contributed to it. at least if there is a real risk that they may be used for continued acts of infringement. This is particularly important in the case of pirate copies. the maximum of which may be up to several years. This means.218 WIPO Intellectual Property Handbook: Policy. of acts of piracy. however. by court order. At least in some national laws the penal provisions for copyright violations apply not only to acts which are committed willfully but also to those committed with gross negligence. location. In this latter case there should exist possibilities for the courts to issue orders expressly prohibiting the continuation of the acts. that the rights should be framed and described in a clear and unequivocal way so that it is obvious which the act or acts are which must not be undertaken without the authorization of the author or other right-owner. More specifically the purpose of such measures is twofold: to prevent the committing. possible violation of his moral rights and also other relevant elements. mainly in view of the alarming growth of the piracy activities. account has to be taken of the material and moral prejudice caused. equipment used for the manufacture of unauthorized copies should. in particular such which would be considered as piracy. or the continuation of the committing. 4. 4. the objective criteria for the infringement must be clearly defined. Law and Use 4. from being brought on to the market without the consent of the copyright owner.64 Penal sanctions have mainly a repressive function. source and destination of the pirated copies or the identity of the person who is suspected of having committed or being likely to commit acts of copyright violation. The desirable principle should be that such copies should be destroyed unless the injured party requests otherwise. special provisions aiming at making an equity assessment of the amount to be paid. for example. they should be surrendered to the injured party. 4. with mention of the fine to be paid in case the order is not respected. It may sometimes be difficult to establish the exact size of the remuneration.65 If copies exist which have been produced through unlawful acts. 4.66 Another important aspect in this context are the conservatory measures which should be available particularly in cases of piracy. If penal sanctions are to work satisfactorily. where the existence on the market of the unlawful copies can cause considerable damage. That compensation should not be limited to a mere reparation of the direct losses inflicted on the specific right-owner. and to secure evidence as to the nature. Such measures are intended to freeze or conserve the situation as it is when the measure is ordered or taken. quantity. it has to be left to the judges’ discretion.63 Penal sanctions should — and in most countries do — include both fines and imprisonment. Also. While such a function is very important in the interest of society and authors too in order to ensure respect for the law (and this is of course particularly obvious in cases of piracy) at least equally important from the individual author’s point of view is the compensatory aspect.67 Usually such measures have to be taken only at the request of the person or legal entity who claims to be injured or to be threatened by injury in an act of piracy. 4. The law has to provide the beneficiaries with real and effective possibilities to obtain compensation for the injury caused to them by the violation of their rights.

by cable or by satellite. but not the least important. ordering the disclosure of the source of the copies suspected to be unauthorized copies. This aspect of WIPO’s work consists basically in ensuring the proper operation of the bodies that govern these various international agreements and in obtaining the accession of the largest possible number of States to them. packaged. since works stored in digital form can be reproduced any number of times without loss of quality when compared with the original from which the copies are made. musical works that are incorporated in sound or audiovisual recordings. ordering the termination of the manufacture or distribution of the unauthorized copies. the police. 4. comprising high-level provisions well adapted to new circumstances and the new technological facilities available to “pirates.Enforcement of Intellectual Property Rights 219 requesting party will be liable for damages caused by the measure and. They can act on behalf of their members. lending or other distribution. the impact of digital technology on copyright and related rights is enormous. 4. the courts. indeed for any repression to have proper effect it is necessary that the most uniform legal framework possible be established. 4. For example. Activities within WIPO Concerning Enforcement 4. some countries have set up special enforcement units either in the Ministry responsible for copyright law matters or within the police or customs forces.69 The repression of activities such as piracy and counterfeiting.Chapter 4 . Indeed. in some countries. Also. that is.72 Another basic aspect of WIPO’s activities. sealing the premises where the unauthorized copies are being manufactured. is a crucial task for WIPO. stored or offered for sale. The measures should include the following: seizure of the goods suspected to be unauthorized copies. it is of prime importance that the provisions drawn up at the international level be applied at the national level. and of business documents referring to the copies. increases the problem of unlawful reproduction and also of private copying. he should be ordered to post a bond. where necessary. In most countries however the enforcement is entrusted to the ordinary enforcement authorities. is the transfer of know-how required to administer the international conventions. both to adapt existing provisions to the new technologies and to reflect the progressively emerging consensus in favor of increasing the level of these provisions.” 4. have particular responsibilities in the field of enforcement. initiate investigations and bring matters to court. rental.70 WIPO administers many international conventions and treaties relating to intellectual property. which are factors of major economic importance.68 Because of the recognized need to take efficient action against copyright piracy. the public prosecutors and the customs authorities. since promotion of creativeness first requires suitable management and the implementation of provisions . The ability to transmit by electromagnetic waves. seizure of the tools that could be used to manufacture or package the unauthorized copies. special State bodies.71 WIPO also develops new legislative provisions.

73 From the late 1990s until 2001. Law and Use adopted in favor of creators. requires the members of the WTO to ensure that effective enforcement procedures are available.74 It is worth recalling that the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). It met for the first time in June 2003.75 In many intellectual property systems. in most intellectual property systems the courts play an important role in hearing appeals from decisions of the Industrial Property Office and in adjudicating infringement actions. Review of Industrial Property Office Decisions Introduction 4. Enforcement Provisions of the TRIPS Agreement 4. 4. Boards of Appeal exist for instance in the European Patent Office and the United States Patent and Trademark Office.76 Whatever the arrangement for internal appeal may be. However. because Commissioners and Registrars are obliged to interpret the law in order to carry out their functions properly. WIPO’s development cooperation activities are particularly important in this respect. which forms part of the overall Agreement establishing the World Trade Organization (WTO).220 WIPO Intellectual Property Handbook: Policy.77 The functions of Patent Offices in most countries are administrative in character rather than judicial. in which Member States asked the Secretariat of WIPO to initiate studies and activities to promote more effective enforcement of industrial property rights worldwide. it is common to have some form of internal appeal against a patent or trademark examiner’s decision. there were initially two WIPO Committees on enforcement – the Advisory Committee on Enforcement of Industrial Property Rights and the Advisory Committee on the Management and Enforcement of Copyright and Related Rights in Global Information Networks. Full membership is open to Member States of WIPO and/or the Paris and Berne Unions. and because third parties’ rights and the public interest must . 4. Intellectual Property Litigation Introduction 4. In September 2002 it was decided that these two Committees would be merged into a single Advisory Committee on Enforcement. The Advisory Committee on Enforcement of Industrial Property Rights held a meeting in October 2001. and the identification of good practices and procedures with which to do so. The TRIPS Agreement also includes provisions requiring action by customs authorities against suspected counterfeit or pirated goods. while keeping the time and cost burden on administrative infrastructures to a minimum. While in the United Kingdom Patent and Trademark Office there is no formal internal appeal. responsible for all intellectual property enforcement issues. a dispute between the applicant and examiner can be taken to a hearing before a senior officer.

that a Patent Office decision is administrative in character. by which the Patent Office declares that the application is deemed to be withdrawn. In such a case. the appeal only involves the owner of the patent for invention and the Patent Office.81 The most frequent decision against which the applicant may appeal to the court is the decision. for example. whereas the applicant claims that it was paid on the same day the application itself was filed. the first decision of the Patent Office is the decision by which it does or does not accord a filing date. On the other hand. supposing the payment of the application fee in a particular country is one of the requirements for according a filing date. administer oaths. 4.82 After the grant of the patent for invention. Post-Grant Appeals 4. Such a decision may be taken. If the invention claimed in the application was published the day after the application itself was filed. in addition to the owner of the patent for invention and the Patent Office.80 Another decision against which the applicant may appeal to the court is the decision. Similar appeals exist in relation to decisions of the Trademark Office. and the Patent Office and the applicant disagree as to when the application fee was actually paid. 4. Pre-Grant Appeals 4. as a consequence. . on the ground that the invention claimed in the application is not new. the application will eventually be rejected for lack of novelty of the invention. notwithstanding that certain functions of the Commissioner or Registrar have quasi-judicial features. If the applicant is not able to convince the Patent Office that the application fee was paid before the publication of the invention. for example. it is important for the applicant to have the right to appeal against the decision according a filing date. In a number of countries.Chapter 4 . taken as a result of the examination of the application as to substance. may wish to appeal to the court against the declaration of lapse.” “Pre-grant appeals” only involve a third party. there may also be cases where an appeal may be lodged against a decision of the Patent Office.79 Chronologically. the Patent Office may have declared that the patent for invention has lapsed because an annual fee has not been paid in due time. the owner of the patent for invention may allege that the annual fee was paid in due time and. the decision of the Patent Office according a filing date is crucial. however. His functions are therefore often referred to as “quasi-judicial. 4. The applicant may disagree with the date accorded and may wish to appeal against a decision. For example. there is at times a tendency to treat office decisions as sacrosanct. Another possible ground for rejection of the application might be that the claims or the description contain substantive defects which have not been eliminated by the applicant. on the ground that a formal defect in the application has not been eliminated in due time or that the invention claimed in the application is contrary to public order or morality.78 Generally speaking appeals can be lodged against decisions taken during or at the end of the procedure relating to an application for a patent for invention — in the case of the former. taken during the preliminary (or formal) examination. does not involve an inventive step or is not industrially applicable. “post-grant appeals. As an example.” It must not be forgotten. The Patent Office alleges that the application fee was paid two days after the date on which the documents constituting the application were filed. Therefore. “pre-grant appeals. Such a decision may be taken.” and in the case of decisions taken after the grant of a patent for invention.Enforcement of Intellectual Property Rights 221 be taken into account. by which the Patent Office rejects the application. require the production of documents or articles and award costs. the Commissioner or Registrar is able to summon witnesses.

4.85 In Japan. the rules of procedure of the appropriate courts apply.91 Often. extensions of time may be required if the appellant cannot give proper instructions on time. it is frequently possible to resolve the dispute without a hearing. Germany and France. Where the law so provides. At the pre-hearing conference there may be questions as to who will have the opportunity to speak and in what order. A similar process exists in the continental system. the owner of the patent for invention.84 Appeal procedures are usually determined by regulations or rules which may be provided for in the patent law.222 WIPO Intellectual Property Handbook: Policy. 4. For example. Pre-Hearing Conference 4. the respective intellectual property laws together with the codes of civil procedure prevail. under common law. In both cases. 4.87 Usually. Under the common law practice. These rules usually give the court wide discretion so that the parties can put forth their best case. and notice is given to the other side. 4. 4. 4. the appeal would involve three parties.88 At common law the rules of procedure will require each party — the appellant (the one who is appealing) and the respondent (the one whose decision is being appealed) — to give the other notice of each step it takes and to give the court proof that notice has been given.89 The rules of procedure will also usually provide for the possibility to deviate from the rules to permit the parties to present their cases properly. If a third party is involved in an appeal. if amendment to refused claims is permitted. the industrial property law sets out the time limit within which an appeal should be filed.” and the memorandum (or brief) on appeal may be required to be filed within a further month. the rules of procedure will establish the time periods for the completion of each step of the procedure.90 Whether or not deviation is permitted in each case is within the discretion of the court. namely. the question may then be settled by the court. provision is made for the convening of a pre-hearing conference to resolve any question as to the procedure which is to be followed at the hearing. The rules of procedure determine when and how each step should be taken. The other side may consent or may appear in court and oppose the request. Usually.83 Another example of a “post-grant appeal” would be against a decision by the Patent Office to grant a compulsory license. Appeal Procedure Introduction 4. . Law and Use 4. a similar appeal would also be possible against a decision by the Patent Office to refuse to grant a compulsory license. the same rule should apply with respect to that third party. the party requesting the grant of a compulsory license and the Patent Office. For example. there are also rules which compel the parties to proceed under penalty of dismissal of their case. a request for the court to permit deviation is made in writing with supporting evidence. For example. in common law countries such as the United Kingdom and Canada. the evidence may be required to be filed with the court one month after the “notice of appeal. in the rules of the specific court.86 Normally. the material to be considered and what facts will be admitted by either side. or in the general rules of procedure of the country.

4. statements and other documentary evidence.97 As a general rule.” namely evidence supplied by writings and documents of all kinds.” namely evidence supplied by things themselves rather than by a description of them. If it is not. relating to competition in the marketplace. and “expert evidence. then there is no option but to follow the second course.95 In a post-grant appeal where the appealed decision was to grant or to refuse a compulsory license. the court.” The intervention of a third party with authority. statements made by parties are usually accepted as true unless they are uncorroborated or contested. “real evidence. 4. all evidence should be introduced in writing.99 Documentary evidence can be subdivided into three elements. If this is the case.” namely oral evidence supplied by an expert. If the document is available. If the document is lost. then it should be submitted. requests for information. research. To the extent possible. . The evidence on that issue will be highly technical.100 The file history usually comprises the patent application.Chapter 4 . if a hearing of oral testimony is requested. a document executed by an inventor transferring a patent for invention to another entity or person duly registered by the Patent Office is the best evidence that the other entity or person is the owner of the patent for invention. This is secondary evidence. In a pre-grant appeal where the appealed decision was to reject the application. selling or marketing. market costs. Documentary Evidence 4. drawings and claims. Evidence 4.98 In the case of oral evidence. if any is given. inspection and sworn statements in writing. market demand or need. 4. For example. 4. This is also called “direct” evidence. hearing witnesses. the objections or observations made by the Patent Office and the observations made by the applicant.93 The word “evidence” as used in judicial proceedings usually means that which may be placed before the court to enable it to determine the issues of fact.96 Three forms of evidence may be distinguished — ”documentary evidence. it will normally be granted. however. proposed market and selling price. opinions by experts. costs of production. may resolve differences between obstinate parties.94 The evidence put forward in pre-grant appeals will in most cases be quite different from the evidence presented in post-grant appeals. A requirement may be made for money to be deposited to cover the costs of these proceedings prior to their commencement. the party or witness testifying will have to be prepared to be subjected to questioning by the adversary or the court. These proceedings may include hearing the parties. Oral testimony.92 In this regard the court may perform a useful function which is sometimes unofficially called “banging heads together. then a statement by a witness that he or she saw the inventor sign such a transfer may be sufficient. production of documents. including the description. facilities. The requesting party will also probably submit evidence as to his technical personnel. 4. 4. namely the file history. the main issue is usually whether what is claimed in the application is or is not a patentable invention. profits and royalty rates.Enforcement of Intellectual Property Rights 223 4. is usually taken down verbatim and recorded in print for review by the authority. the evidence will tend to be almost exclusively commercial. the court may call for further evidence.

Again. the utility or usefulness of the invention. Presentation of Evidence 4. unsolicited testimonials. together with the Patent Office comment on its significance. market surveys. why they are presented and an explanation as to their technical significance. the commercial success of the invention. Statements which indicate nothing other than that the subject matter of the application is a patentable invention are merely self-serving and are consequently not persuasive.103 Sometimes the “supposed” evidence may also include statements by the inventor. 4. 4. The word “supposed” is used intentionally because frequently this “evidence” is not proof but rather argument. what they show. Law and Use 4. and of course the decision of the Patent Office and its reasons. It cannot show. that is. evidence of the “public mind” or the state of public opinion in relation to a particular trade name. the state of common general knowledge at material dates. Real Evidence 4. 4. the meaning of technical terms and the novel or surprising nature of the invention claimed when considered in the light of prior art and knowledge. These statements or affidavits are written documents which are signed by the person making them before either an officer of the State or an officer of the court who ensures that the person signing knows the consequences and .107 In trademark cases in particular. the mode of operation and result of the solution disclosed in it. general evidence is often received from expert witnesses as to prior use. or “affidavits. Expert Evidence 4. comments on the structure.102 The observations made by the applicant will normally include observations on the publication. experimental reports.104 There may be other documentary evidence. evidence is presented in the form of sworn statements.” There is some dispute as to the effect of such evidence. In recent times there have been endeavors to put into evidence the results of market surveys and market research as evidence of the “public mind. mark or get-up is both relevant and admissible.105 Real evidence such as models.” on the most important points. for example. may also be shown.106 In relation to the issue of validity in patent proceedings. photographs. the observations by the Patent Office will normally include that publication. Market Survey Evidence 4. Evidence of a market survey may prove no more than that certain opinions were expressed by individual persons interviewed. together with comments on how the applicant’s invention differs on each of these points from that solution. actual machines described in the state of the art and the subject matter of the patent application. that such opinions were genuinely held by them or how they arrived at them. Such statements are no more than mere unsubstantiated opinions.101 If the Patent Office had rejected the application because there is in the state-of-the-art a publication which destroys the novelty of the invention. sales figures. the intelligibility and sufficiency of the patent specification to a competent technician. all these materials should be introduced by showing the source.108 In common-law and some civil-law countries.224 WIPO Intellectual Property Handbook: Policy. in the absence of direct evidence to the court.

it may refer the case back to the Patent Office for reconsideration.114 The usual defense in an infringement action is that the alleged infringement simply does not fall within the scope of the patent in suit. It is in this area that expert evidence is frequently required. This will require the court to construe the patent specification. that is lack of novelty. it may grant the appeal. Moreover. in patent infringement actions. the burden of which always remains with the plaintiff. there are a number of statutory grounds by which a defendant can seek to impugn the validity of the patent: to mention some.109 In the absence of a third party to any proceedings.112 The first task in any patent infringement action is to accurately assess the limit of the rights granted. the use of experiments is often resorted to in order to prove infringement. or. The questions may be directed to any matter raised in the statement and are generally directed to the accuracy of and basis for the statement. that the patentee has not sufficiently or fairly set out the manner in which the invention is to be worked.Chapter 4 . In general it is not permitted to adduce expert evidence to construe words which are capable of an ordinary meaning in English.” 4.111 When disposing of the appeal. Infringement Actions Patent Infringement 4. The basis for the court’s authority to act is usually in the patent law or it may be found in other general legislative provisions. 4. the court normally has the following courses of action available: it may refuse the appeal. he may rely upon anticipation.110 In some countries. One therefore has to be sure that they are relevant and true. The only exception is when technical words are used for which the court may require a technical explanation. . “Cross-examination” is a procedure in which an adverse party questions the person who gave the statement. if the decision appealed against was a decision to reject the application. it is not permissible to look into the body of the specification so as to try and twist or strain the meaning of ordinary English words so that they can “catch” the infringement.113 The next task facing the court is to decide whether the alleged infringement falls within the scope of the claims which it has construed.Enforcement of Intellectual Property Rights 225 penalties for making false statements. If the court refers the case back to the Patent Office. As in trademark infringement. when a third party is involved — for example. Similarly. in the case of a compulsory license — the third party may be given the opportunity to “cross-examine” the party who gave the statement to test the validity of the facts set out. the court’s first task in construing the specification is to have no regard to either the alleged infringement or what is called the “prior art. This is often not easy. 4. 4. particularly when the defendant has been well advised. these sworn statements are normally accepted as evidence of the facts to which they attest. that the invention is obvious. In fact. it may make recommendations for amendment of the claims. it may amend the claims and give directions to the Patent Office to grant the patent for invention. The general law makes provision for penalties where false statements have been made. Final Disposition 4. But far more important than the defense will often be a counterclaim for revocation of the patent. considering the claims. description or drawings to overcome positions one or both parties have taken unjustifiably.

Copyright Infringement 4. 4. The two species of protection are very different. for example.” And in another case “what is worth copying is prima facie worth protecting. Other defenses may be: that.” By reproduction is generally meant the right to multiply copies of the work. assuming a causal connection. in other words. this is an area where expert evidence is important and it is not unusual for the counterclaim in a patent infringement action to take more time than the claim itself.116 A causal connection between the copyright work or the alleged infringement is essential and is a major distinction between the protection afforded by patents and registered designs — both of which are full monopolies. there will be no infringement. bearing in mind particularly that copyright does not protect ideas (which may or may not be the proper subject of a patent) but rather the way in which ideas are expressed and articulated. Naturally. 4. . Again. although there has been some degree of copying. the court will by way of balance always be mindful not in effect to give a plaintiff the benefit of a 50-year protection for an idea under the guise of copyright.” 4. If. Law and Use that the invention is not useful.115 The first of the acts restricted by copyright is “reproduction.117 Many statutes qualify “reproduction” with some such phrase as “or substantial reproduction. On the other hand.118 What the court must do is to assess whether. a substantial part of the work in issue has not been taken. the court must examine the degree of resemblance with this in mind: that for infringement to arise. that the work is no longer in copyright. the defendant has helped himself to too liberal a portion of another’s labor or work.119 In view of the foregoing it is clear that the most obvious defense is that the impugned work was independently arrived at.226 WIPO Intellectual Property Handbook: Policy.” The question of what is “substantial” will again depend on the facts and circumstances of each case and will be for the court to assess. Reproduction is not defined in any of the acts but its meaning is probably very similar to “copy. they both copied from a common source or they arrived at their results truly independently. adopted its essential features and substance. It has been said in a leading case that “the question whether the defendant has copied a substantial part depends much more on the quality than the quantity of what he has taken. 4.” What is a copy will be a question of fact and degree. that it has been obtained on a false suggestion or misrepresentation or that it has wrongfully been obtained from another. Some or all of these grounds are available in most patent statutes in the Commonwealth. the production of even one copy being an infringement. the onus here is on the defendant seeking revocation of the patent. certain other statutory defenses such as fair dealing and use for educational purposes. He must show that this causal connection is the explanation of the similarity between the two. there must be such a degree of similarity as would lead one to say that the alleged infringement is a copy or reproduction of the original — having. The plaintiff must prove that directly and indirectly the defendant has copied from the work matter in which he claims copyright. When the copy is not exact.

the action to restrain a defendant from passing off his goods as the goods of the plaintiff was a generalized form of an action to restrain the infringement of a trademark. This is the main respect in which protection of goodwill has been made easier and more efficacious by registration. it is enough that the mark is inherently distinctive and that the plaintiff has a bona fide intention to use it as a trademark for the goods in question. The concept of Part B marks was introduced so as to satisfy a somewhat lower standard of distinctiveness for registration and as a consequence. Historically. whether it has a geographical signification. In spite of the co-existence of these two forms of action. 4. etc. the date of the registration.123 An important distinction between the action for trademark infringement and passing-off is that whereas in passing-off it is essential that the plaintiff should by evidence prove his reputation. If infringement of a registered trademark exists in a particular case. passing-off has never been abolished or allowed to slip into disuse. the goods in respect of which registration has been secured. whether it has any direct reference to the character or quality of the goods in respect of which registration is sought. In several countries trademark registration is available in respect of both goods and services.120 These two topics are closely related. the distinction between the two types of action arose. to secure registration. 4. 4. particularly if it is a device mark. Trademarks may of course only be registered after satisfying specific conditions imposed by statute and enforced by the Registry.121 This is a statutory tort arising by virtue of registration of the trademark in issue at a national Trademarks Registry. the registered proprietor may proceed against infringers without the uncertainty and expense of having each time to prove his actual trading reputation. Once registered. the name and details of its proprietor.124 In trademark infringement actions. whether it has been registered in Part A or Part B of the Register. this is not necessary for the purposes of proving trademark infringement. The copy certificate should.Chapter 4 . Registration involves consideration of such topics as distinctiveness of the proposed mark. in respect of which different considerations arise. to give a somewhat lower level of protection in litigation. When the possibility of registration of trademarks first became available at the end of the last century. Registration may take place before any reputation has been acquired in the mark through actual use. there still exist two categories of trademark — those falling under so-called Part A and Part B of the Register. be scrutinized with care for at least the following information: the mark itself and the exact manner in which it is represented. however.Enforcement of Intellectual Property Rights 227 Trademark Infringement and Passing-Off 4. the court is often faced with the likelihood of a counterclaim for rectification of the Register of Trademarks by expunging therefrom the trademark . whether it is an invented word. whether it has signification as a surname. Trademark Infringement 4. the plaintiff will usually also plead passing-off. In some Commonwealth countries.122 Evidence of ownership of a trademark will generally be adduced by a duly certified copy of the entry in the national Trademark Register.

texture or materials of the product or its ornamentation” (Section 1(2) of the United Kingdom Registered Designs Act. and in most cases do not get beyond this preliminary stage. Remedies 4. in the nature of a monopoly. a trading name or style for either goods or services or through presentation. Like a patent the design has to be construed by the court prior to considering issues of infringement and validity. except such features as are functional. shape. in particular. for instance. has the following definition of design: “In this Act. 4. which is a fundamental requirement for a valid design.129 In other words the proper subject of a registered design consists of what the eye can appreciate in its application to an article. ‘design’ means the whole or a part of a product resulting from the features of. It will seldom be appropriate to adduce evidence to assist the eye in this respect. the defendant will invariably counterclaim for rectification of the register of designs. It should be noted that the second proposition does not arise unless and until the plaintiff has established the first.131 The remedies typically available in intellectual property infringement actions are injunctions. he must show that he has an exclusive right to a particular name for his goods or a particular trade description or particular presentation. But he may also wish to impugn the design by showing it to be or consist of features or shapes or configurations which are dictated by the function above.126 Any misrepresentation calculated to injure another in his trade or business may provide the basis for a passing-off action.125 Passing-off can arise in respect of a common law trademark. They consist of an exclusive right of limited duration. . In essence passing-off concerns the wrongful appropriation of the benefit of the reputation or goodwill of another. as amended by Article 2 of the Registered Designs Regulations 2001). 1949. The various national trademark laws establish grounds on which a trademark may be so removed and these involve in part the grounds available to an opponent at the registration stage. in other words. so that consumers are likely to buy the defendant’s goods in the belief that they are the plaintiff’s goods. Registered Designs Infringement 4. 4. he may choose to rely on lack of novelty. 4.228 WIPO Intellectual Property Handbook: Policy. Law and Use in issue. that the defendant has infringed that right by selling goods under a name or description or with a presentation which is likely to lead to confusion.130 Apart from the obvious defense that the product in issue does not fall within the scope of the design. But in each case the plaintiff must establish two propositions before he can succeed: the first is that he has a legal right. damages and account of profits. 4. In addition. colours. the lines.128 The United Kingdom. and secondly. shape or packaging. further grounds are available such as the non-use of the mark. Passing-Off 4. that is the eye of the court. Most actions start with an application for some form of preliminary or interlocutory relief.127 Registered designs have a close analogy with patents. By its nature the entire exercise here is done by the eye. that is. in the light of prior art. As with patents. by the addition to an article of something that gives it a distinctive appearance — be it color.

in such a case. Furthermore. 4. where there has been extreme delay) will a permanent injunction be refused. The period from the time of commencement of proceedings to the final determination of a case can allow significant damage to be done to sales and profits and to reputation. due to other exploitation of material and/or information. a successful plaintiff in an industrial property action will be entitled to a final injunction. the nature of the infringement or other unlawful conduct may be such as to make damages or an account of profits an inadequate remedy. the main purpose of which is usually described as being to preserve the status quo until the hearing of the main action. Although preserving the status quo as at the time of making an application is usually the most appropriate order. for example. One of the reasons for this is that the defendant may be impecunious or may disappear. the result would be tantamount to enabling . The relief granted is an ex parte order for entry and inspection of premises and removal of evidence.134 In an increasing number of cases interlocutory injunctions are not sufficient to protect intellectual property rights against the threat of continuing infringement. In recent years a speedy and effective means of obtaining and preserving such evidence has been developed by courts in the United Kingdom. damages may not be an adequate remedy. 4. a court will sometimes order that an earlier position be restored. If. and may be a necessary step before an interlocutory injunction can be obtained. the ease with which money can be moved from one country to another and advances in technology. where the defendant is the sole source of a life-giving drug or. The grant of injunctions is discretionary and only used in unusual situations. the defendant’s unlawful conduct is restrained at the outset. But these will not be the only reasons why. this is not the main concern of the interlocutory injunction. in a particular case. More often. Final Injunction 4.133 The most useful and widely used preliminary remedy is the interlocutory or interim injunction. in a copyright case. This is often because the evidence needed to sustain an application for both interim and final relief is not readily available and will not become available through the usual processes of discovery.Chapter 4 . or that the parties arrange their affairs in some other way that is more in accordance with the requirements of justice.135 Similarly. In such a case the plaintiff will be unlikely to obtain an interim injunction because he will not have the necessary evidence. These orders are known as Anton Piller orders. Thus. The primary matter with which the court is concerned in granting an interlocutory injunction is the maintenance of a position that will most easily enable justice to be done when the final determination is made. this is because of the nature of the intellectual property right in question and the difficulty of reaching a precise estimate of the loss suffered as the result of an infringement. In order to address this problem the courts of common law countries have formulated and developed the Mareva injunction which operates to prevent defendants from removing assets from the jurisdiction or from disposing or dealing with them within the jurisdiction in such a way as to frustrate any judgment that may be entered against them. This is a serious problem given the increasing resourcefulness of those attempting to avoid their obligations. to a successful patent proprietor. (for example. If an injunction were not granted. 4. the collection of evidence and even a final judgment in favor of a plaintiff may be to no avail if the defendant has no assets which can be used to fund any damages ordered. Sometimes the defendant will remove or destroy the infringing material.136 In the normal course. the problem of damages may either disappear from the case altogether or be very much less difficult than otherwise would be the case.Enforcement of Intellectual Property Rights 229 Preliminary Relief: The Interlocutory Injunction 4.132 Preliminary remedies are of the utmost importance to the protection of all these intellectual property rights.

4. 4. The most common are arbitration and mediation. in this case the plaintiff is entitled to the entire lost profit.137 The assessment of damages in industrial property cases invariably demands as a first step an election by the successful plaintiff as to whether he will take an inquiry as to damages on the one hand. for example. There is however no universally appropriate test or formula for assessing damages. or an account of profits on the other. Passing-off and trademark infringement may be considered together as may patents and registered designs.139 The assessment of appropriate damages in industrial property cases vary somewhat between the several causes of action. The choice in each case will depend on the facts. Damages for past infringement are then based upon a payment of a royalty in respect of. When this is done. This approach has also been used in breach of confidence and copyright infringement cases. each infringing article. time may be of the essence and the trial as to liability may have itself generated enough material evidence to enable a plaintiff to move speedily for an account. the plaintiff can move for contempt of court. refers to methods of resolving intellectual property disputes without having to start court proceedings. Judicial views on the correct approach to damages for breach of confidence have been divergent. . Law and Use the defendant to take a compulsory license under the patent without having to go through the statutory provisions relating to compulsory licenses. Sometimes. For this reason. Damages in any of these fields are notoriously difficult to assess with any degree of accuracy. Another approach which is more difficult to prove is through consideration of sales lost to the plaintiff.141 Alternative Dispute Resolution. 4. a successful plaintiff will ask for an order that an inquiry as to damages be taken.140 A common approach has been to assess damages on the basis of a notional arm’s length license: this will arise for example when the parties are competitors and is usually appropriate to patent and registered design cases. and the courts have sensibly taken this into account by declining to lay down general rules. Should the injunction be breached. In such cases. These alternatives are of course mutually exclusive since by electing to go for an account.138 Usually.230 WIPO Intellectual Property Handbook: Policy. There are many forms of ADR. in a difficult case. and in copyright cases special statutory provisions exist. or ADR. fully litigated industrial property cases seldom go as far as a full inquiry as to damages. Sometimes a defendant may have been able to secure more sales of the product in issue during the infringing period than the plaintiff could possibly have done. the plaintiff may have to endure a fresh trial almost as substantial as the trial as to liability. the plaintiff has adopted the defendant’s acts as his own. and in the field of industrial property experience shows that such action on the part of a plaintiff is not at all infrequent. Damages or Account of Profits 4. for instance. Intellectual property disputes are also resolved on the basis of expert opinions. Arbitration and Mediation of Intellectual Property Disputes Alternative Dispute Resolution 4. however. the plaintiff will again be likely to choose an account rather than an inquiry — which will incidentally be for net profits. But problems do arise here — particularly when in reality the plaintiff would never have granted a license. they tend to settle when liability has been established.

142 Arbitration has a long history. they must ensure that a judgment will be enforceable in any jurisdiction where that is required. Enforcement in the International Context 4. particularly in certain areas of commerce.Chapter 4 . and questions by the arbitrators and the parties.144 The advantages of arbitration are generally regarded to be the speed with which a decision can be reached. instead of a variety of courts.Enforcement of Intellectual Property Rights 231 Arbitration 4. 4. Mediation takes account of the parties’ respective interests. more than their legal positions. Expert Determination 4.143 Arbitration is consensual: it requires that the parties agree to have their dispute referred to an arbitrator.146 Another form of ADR is mediation. but still shares some of the elements of a court procedure. sometimes also called conciliation. In the context of dispute resolution this raises an important difficulty. but this may not be an acceptable option to the would-be claimant . The parties have flexibility in the powers that they permit the arbitrator to exercise and may choose the applicable procedures. If the mediation is successful. and a hearing allowing oral argument. and on the absence of institutional appeal. The arbitral award is final. its informal character and the facility with which an arbitral award can be enforced internationally. The time and cost advantages of arbitration are based in part on the resolution of a multijurisdictional dispute in one single forum. witness and expert testimony. usually by including reference to the rules of an arbitration institution. including witness and possibly expert statements. An arbitration will normally include an exchange of written memorials. 4. Mediation 4.147 Mediation is particularly attractive where the parties wish to preserve or develop their relationship and resolve a dispute privately. The parties usually do this by including in their agreement a clause providing for the submission of disputes to arbitration. 4.150 The enforcement in the defendant’s jurisdiction of a court judgment obtained in the claimant’s jurisdiction can be difficult.149 Many technology transfer agreements are international. the settlement has the effect of a contract between the parties.145 Arbitration is a less formal procedure than litigation. 4. If parties to an agreement are relying on the courts to resolve their disputes. This voluntary character also applies once the mediation is under way: each party may terminate its participation at any stage.148 In particular in technology transfer agreements it is not unusual to find that the parties have agreed to refer any technical disputes to an expert. This problem can be overcome by initiating proceedings in the respondent’s jurisdiction. the confidentiality of the procedure. A mediator is a neutral person who assists the parties in resolving their dispute. Again the agreement of the parties to submit their dispute to mediation will be required. the lower cost at which this can be done. Such an expert will be an independent third party with the necessary expertise in the relevant technology field. 4.

. the existence of a multiplicity of national and regional rights covering the same subject matter indicates the need for dispute resolution procedures which avoid recourse to different national court actions. it would not solve the problems raised by the possible need to enforce such a judgment in a third jurisdiction where the respondent has assets. Often. however. 4. Under the terms of the widely accepted New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. they seek wider protection for their intellectual property.157 In addition.151 Generally. The developments in the area of arbitration have not necessarily found expression in contractual provisions directed at the efficient resolution of possible disputes.152 In September 1993. courts and language of that jurisdiction. 4. and various combinations of procedures. and intellectual property on the other hand. contracting States are obliged to recognize and enforce arbitral awards subject to a limited number of specified exceptions. Even if a multiplicity of separate national claims is not involved. The Center also administers special administrative procedures for the resolution of disputes arising out of the registration of Internet domain names (see section below). as enterprises seek to penetrate a wider geographical area.155 The increasingly technological basis of production. the types of ADR procedures available have evolved beyond traditional arbitration and mediation to include new forms adapted from the classical model of arbitration.153 The Center was created to bridge two areas which have recently undergone considerable changes in parallel to. 4. no such enforcement problems exist with regard to arbitral awards.156 The increased resort to international protection of intellectual property opens new possibilities for the use of ADR. and the proliferation and variety of media of communication have all contributed to giving unprecedented prominence to intellectual property. 4. legal culture. 4. the opposition of two foreign parties might require neutral dispute-resolution procedures that avoid the court system of one of the parties. At the same time.154 The number of institutions administering arbitration throughout the world has grown considerably. mini-trials. WIPO Arbitration and Mediation Center 4. Moreover. These areas are arbitration.232 WIPO Intellectual Property Handbook: Policy. on the one hand. rather than in conjunction with. as have the numbers of arbitration proceedings initiated. particularly in the United States of America. the emphasis on image and marketing for the distribution of goods and services. The Center offers services for the resolution of intellectual property disputes between private parties through arbitration and mediation. This reflects the internationalization of markets. 4. or more generally ADR. The existence of more rights raises the potential for a larger number of conflicts involving those rights. now called the WIPO Arbitration and Mediation Center. those negotiating the licenses and other contractual arrangements pay more attention to the successful conclusion of a potential business arrangement than to the consequences of any breakdown thereof. each other. The increase in the number of intellectual property titles sought is mostly due to the increase in foreign-origin applications. Law and Use because he is probably less familiar with the law. the WIPO General Assembly unanimously approved the establishment of the WIPO Arbitration Center.

4.161 Arbitration: a procedure involving the submission of a dispute. This procedure may be practical. While specialized courts exist in a number of countries. relevant knowledge.158 Besides the recent evolution of intellectual property protection. if this does not produce a settlement. the possibility to choose neutrals with specialized expertise is of great importance in the highly technical and scientific subject matter covered by patents. the mediator.162 Expedited Arbitration: an arbitration procedure where the rules limit the procedural steps in the proceedings. it may be more efficient to submit a dispute to an arbitral tribunal composed of at least one expert with specialized. many of the traditional advantages in favor of ADR apply particularly to intellectual property. Alternatively. the WIPO Expedited Arbitration Rules. resulting in a binding and internationally enforceable award.Enforcement of Intellectual Property Rights 233 4. particularly for disputes which do not justify. 4. Model contract clauses can be included in agreements to submit future disputes to such procedures. The rules envisage that certain functions will be performed by the WIPO Center with respect to the conduct of the dispute-resolution procedure. endeavors to aid the parties in reaching a mutually satisfactory settlement on the basis of their respective interests.165 The second type of service provided derives from these rules. . trade secrets. the confidentiality of arbitration and other procedures offers advantages where know-how or other confidential information may be exposed in the course of a dispute.000 arbitrators and mediators from more than 100 countries with experience in commercial. and/or the WIPO Mediation Rules. if necessary with reference to the Center’s database of more than 1.164 The services that the WIPO Center provides in relation to the four procedures are essentially of two types. in accordance with the law and procedure adopted by the parties.163 The above procedures may also be combined: parties agree to try first to resolve the dispute through mediation. at the request of the parties to a dispute and without the power to impose a settlement. in order to obtain a quicker result at a lower cost than in conventional arbitration proceedings. the WIPO Arbitration and Mediation Center offers services in relation to four dispute-settlement procedures: 4. 4. to a mutually acceptable arbitrator or a tribunal of arbitrators. recourse to court litigation or conventional arbitration.159 Established in recognition of the developments described above. either party may submit the dispute to arbitration or expedited arbitration for a binding decision.160 Mediation: a procedure in which a neutral intermediary. 4. copyright and plant variety rights. In addition. have been mentioned above. 4. The frequently multijurisdictional character of intellectual property disputes. The registration and administration fees are lower than those applicable to an arbitration conducted under the WIPO Arbitration Rules. and the opportunity to resolve such disputes in a single forum. intellectual property and information and communications technology dispute resolution. pursuant to an agreement of the parties.Chapter 4 . such as the following: assistance to the parties in selecting and appointing the mediator(s) or arbitrator(s). and may call on expert assistance. in terms of personnel or financial costs. 4. the WIPO Arbitration Rules. The first type involves making available to parties the instruments for the resolution of a dispute pursuant to one of the procedures administered by the WIPO Center. submission agreements can be used to submit existing disputes to one of the procedures. Fixed arbitrators’ fees apply to disputes of up to 10 million US dollars. Furthermore.

Internet domain names have increasingly come into conflict with trademarks and other intellectual property rights. assisting the parties in organizing any other support services that may be needed. Adopted by the Internet Corporation for Assigned Names and Numbers (ICANN). they lend themselves to the resolution of all types of commercial disputes. . where they are required.org and the more recently introduced new gTLDs. The procedures may be applied in any legal system in the world. fixing the fees of the arbitrators and mediators. on the basis of recommendations made by WIPO in the Report of the First WIPO Internet Domain Name Process. . In December 1999.info.name and . the WIPO Arbitration and Mediation Center organizes conferences on arbitration and mediation.167 In addition to offering arbitration and mediation services. such as fees for interpreters.234 WIPO Intellectual Property Handbook: Policy. . . .biz. when the proceedings take place outside Geneva.pro.net and . when the proceedings take place at WIPO in Geneva. liaising between the parties and the tribunal or mediator with a view to ensuring optimal communications and procedural efficiency.aero. in consultation with them and with the parties.166 The services described above may be used anywhere in the world. as well as workshops for arbitrators and mediators. the procedure is optional for trademark owners: instead of or in addition to availing themselves of the UDRP. WIPO Internet Domain Name Dispute Resolution Uniform Domain Name Dispute Resolution Policy 4. the UDRP provides holders of trademark rights with an administrative mechanism for the efficient resolution of disputes arising out of the registration and use in bad faith by third parties of domain names corresponding to those trademark rights. such as for a licensing dispute. such as translation. 4. While the WIPO Rules are especially suitable in an intellectual property context. The UDRP applies to registrations in generic toplevel domains (gTLDs). - 4. they . . . providing such other services or functions as may be required to ensure that the arbitration or mediation procedures are conducted efficiently and expeditiously.com.168 As a result of their growing popularity and of their commercial application.museum. the WIPO Arbitration and Mediation Center became the first provider of dispute resolution services under the Uniform Domain Name Dispute Resolution Policy (UDRP). assisting the parties in organizing appropriate meeting rooms and other required facilities. administering the financial aspects of the proceedings. Law and Use - guidance regarding the application of the relevant procedural rules. Being administrative (and not arbitration). by obtaining a deposit from each party of the estimated costs and paying out of the deposit the fees of the arbitrators and mediators and any other support service or facilities.coop. in any language and under any law chosen by the parties. . interpretation or secretarial services. providing a meeting room and party retiring rooms free of charge.

a procedural flowchart and a practical guide.173 Registries of new gTLDs (. . New gTLDs 4.172 The simplicity of the system also extends to WIPO’s non-profit schedule of fees. In addition to source documents. 4. 4.169 The UDRP is limited to cases of registration and use in bad faith. By contrast.biz. indications that the domain name has been registered for the purpose of selling it to the trademark owner or attracting visitors to the registrant’s site by creating a likelihood of confusion with a third party’s trademark. The UDRP lists several examples of such bad faith. losing registrants may also go to court. domain name registrants must submit to the UDRP procedure.info. All WIPO UDRP decisions are also searchable through the online index of WIPO UDRP Decisions.Enforcement of Intellectual Property Rights 235 may go to court.coop. however.171 The WIPO Center has established services especially designed for the submission and conduct of UDRP cases. It has adopted Supplemental Rules regulating such aspects as the applicable fees. The costs of the procedure are normally borne in full by complainants. The purpose of these procedures is to provide trademark owners with additional means to ensure the protection of their rights on the introduction of these new domains. . 4. the Center makes available model forms for the filing as well as the defending of a case.pro) have for the most part implemented. who pay a fixed amount that covers both the Center’s services and the remuneration of the panel. If the panel orders the transfer or cancellation of the domain name (these are the sole remedies available. publicly available at the Center website. For a complaint to succeed.aero.biz . A reasoned decision is taken two weeks later by the panel. 4. . and (iii) the domain name has been registered and is being used in bad faith. since monetary damages in particular are excluded). which allows structured access to the large quantity of legal and other data contained in those decisions. the complainant must establish that the following three cumulative criteria are met: (i) the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights. .museum. and (ii) the registrant of the domain name has no rights or legitimate interests in respect of the domain name. in addition to the UDRP. The Center posts notice of the filing of a case and the full text of decisions on its website. for example. .Chapter 4 . Under the WIPO schedule. domain name. the respondent has 20 days to file a response from the date the WIPO Center notifies the respondent of a complaint filed with the Center. the actual level of the fee depends on the number of domain names concerned and on whether the case is to be decided by a single. who are independent trademark and Internet specialists from a multitude of jurisdictions.or three-member panel. The WIPO Center then appoints an independent one. the registrar is obliged to implement the decision.or three-member panel to decide the case. allows decisions to be searched by case number. It offers extensive biographical information about the neutral persons on the Center’s roster of panelists. The entire WIPO procedure is conducted and managed largely online. once a complaint has been filed concerning the domain name held by them.170 Under the UDRP.info Sunrise Registration Challenge Policy and the . providing significant time (the average case duration is less than two months) and cost benefits to all concerned. The index. except if the losing domain name registrant files a court case against the complainant within ten days of the panel decision. text of decision and legal keywords. dispute resolution procedures specifically geared to conflicts arising during the initial registration phase. The Center website provides parties with an efficient online infrastructure for WIPO’s domain name dispute-resolution services. These forms can be submitted to the Center as an e-mail attachment or online through the Center website. The .name and .

Law and Use Start-Up Opposition Policy are examples of such procedures. registries that are restricted to certain purposes (for example.236 WIPO Intellectual Property Handbook: Policy. the introduction of further gTLDs. Developments 4. Furthermore. the possibility of registering domain names in different languages and the introduction of similar dispute-resolution services at the request of certain countries’ toplevel domain (ccTLD) registrars make it likely that the role of the Center in relation to domain name disputes will expand further.biz for commercial purposes) provide special proceedings to resolve disputes concerning compliance with their respective registration conditions.174 The WIPO domain name dispute resolution services are meeting with significant demand. some 21. up to the end of 2003. The possible expansion of the scope of the UDRP to encompass domain name disputes affecting other rights related to intellectual property. .233 cases under the UDRP and other applicable domain name dispute resolution policies. . The Center has processed.

Chapter 5 International Treaties and Conventions on Intellectual Property The Paris Convention for the Protection of Industrial Property History Principal Provisions Administrative and Financial Provisions The Berne Convention for the Protection of Literary and Artistic Works History Principal Provisions The Latest (Paris) Act of the Convention Administration Developing Countries and the Berne Convention The WIPO Copyright Treaty (WCT) Introduction Legal Nature of the WCT and its Relationship with Other International Treaties Substantive Provisions of the WCT Administrative Provisions The Patent Cooperation Treaty (PCT) Introduction The Functioning of the PCT System Advantages of the PCT System Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure Background to the Treaty Summary of the Treaty Main Advantages of the Treaty .

The Madrid Agreement Concerning the International Registration of Marks and the Protocol Relating to the Madrid Agreement Introduction The Functioning of the System of International Registration Becoming Party to the Agreement or Protocol Advantages of the System The Hague Agreement Concerning the International Deposit of Industrial Designs Introduction The Principle of International Deposit Main Provisions of the Hague Agreement Benefits of Accession to the Hague Agreement The Geneva Act of the Hague Agreement The Trademark Law Treaty (TLT) Introduction Provisions of the Treaty and the Regulations The Patent Law Treaty (PLT) Introduction Provisions of the Treaty and the Regulations Advantages of the PLT Treaties on Classification Introduction The Strasbourg Agreement Concerning the International Patent Classification The Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks The Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks The Locarno Agreement Establishing an International Classification for Industrial Designs Special Conventions in the Field of Related Rights: The International Convention for the Protection of Performers. Producers of Phonograms and Broadcasting Organizations (“the Rome Convention”) Introduction Relation between the Protection of Related Rights and Copyright Principal Provisions The Implementation of the Rome Convention The Rome Convention and Developing Countries Other Special Conventions in the Field of Related Rights The Other Special Conventions Reasons for and Purposes of the Special Conventions Main Features of the Special Conventions Substantive Provisions of the Phonograms Convention Substantive Provisions of the Satellites Convention .

Basic Principles and Final Provisions (Parts I and VII) Standards Concerning the Availability.The Phonograms and Satellites Conventions and Developing Countries The WIPO Performances and Phonograms Treaty (WPPT) Introduction Legal Nature of the WPPT and its Relationship with Other International Treaties Substantive Provisions of the WPPT Administrative Provisions Audiovisual Performances The International Convention for the Protection of New Varieties of Plants Introduction The International Union for the Protection of New Varieties of Plants (UPOV) The 1991 Act of the UPOV Convention Developments in Plant Variety Protection The Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) and WIPO-WTO Cooperation Introduction General Provisions. Scope and Use of Intellectual Property Rights (Part II) Enforcement of Intellectual Property Rights (Part III) Acquisition and Maintenance of Intellectual Property Rights and Related Procedures (Part IV) Dispute Prevention and Settlement (Part V) Cooperation between the World Intellectual Property Organization and the World Trade Organization Progressive Development of International Intellectual Property Law Introduction The Joint Recommendation Concerning Provisions for the Protection of Well-Known Marks The Joint Recommendation Concerning Trademark Licenses The Joint Recommendation Concerning the Protection of Marks. on the Internet . and Other Industrial Property Rights in Signs.

Law and Use .240 WIPO Intellectual Property Handbook: Policy.

4 This led to two developments: firstly. 1873. It was only during the first quarter of the 20 century and then particularly after World War II that the Paris Convention increased its membership more significantly. Secondly. Portugal. 5. which ended with final approval and signature of the Paris Convention for the Protection of Industrial Property. Guatemala. bringing the initial number of member countries to 14. a special Austrian law secured temporary protection to all foreigners participating in the exhibition for their inventions. 5.International Treaties and Conventions on Intellectual Property 241 The Paris Convention for the Protection of Industrial Property History 5.1 During the last century.” 5. Guatemala and Ecuador later denounced the Paris Convention to join th again in the 1990s. starting with the Brussels Conference in 1900. El Salvador. 1884.6 Following that Congress. participation was hampered by the fact that many foreign visitors were not willing to exhibit their inventions at that exhibition in view of the inadequate legal protection offered to exhibited inventions. The Paris Convention was signed by 11 States: Belgium. trademarks and industrial designs. the Congress of Vienna for Patent Reform was convened during the same year. patent applications had to be made roughly at the same time in all countries in order to avoid a publication in one country destroying the novelty of the invention in the other countries. France.8 The Paris Convention has been revised from time to time after its signature in 1883. Moreover. These practical problems created a strong desire to overcome such difficulties. together with an invitation to attend the 1880 International Conference in Paris. Its main result was a decision that one of the governments should be asked to convene an international diplomatic conference “with the task of determining the basis of uniform legislation” in the field of industrial property. 5. Italy.3 When the Government of the Empire of Austria-Hungary invited the other countries to participate in an international exhibition of inventions held in 1873 at Vienna.5 As a follow-up to the Vienna Congress. 5. the Netherlands. It elaborated a number of principles on which an effective and useful patent system should be based. Great Britain. 5.Chapter 5 . 5. Brazil. and urged governments “to bring about an international understanding upon patent protection as soon as possible. an International Congress on Industrial Property was convened at Paris in 1878.2 During the second half of the last century the development of a more internationally oriented flow of technology and the increase of international trade made harmonization of industrial property laws urgent in both the patent and the trademark field. El Salvador. ended with the adoption of . That Conference adopted a draft convention which contained in essence the substantive provisions that today are still the main features of the Paris Convention.7 A Diplomatic Conference was convened in Paris in 1883. Serbia. When it came into effect on July 7. Spain and Switzerland. it was difficult to obtain protection for industrial property rights in the various countries of the world because of the diversity of their laws. Tunisia and Ecuador had adhered as well. a final draft proposing an international “union” for the protection of industrial property was prepared in France and was sent by the French Government to a number of other countries. Each of the revision conferences. before the existence of any international convention in the field of industrial property.

5. If they have their actual headquarters in another member country. trademarks and other subjects of industrial property.10 National treatment means that. - National Treatment 5. Principal Provisions 5. no requirement as to domicile or establishment in the country where protection is claimed may be imposed upon nationals of member countries as a condition for benefiting from an industrial property right. that of Stockholm of 1967. the status of being a national of a particular country may be difficult to determine. According to Article 2(1). With the exception of the Acts concluded at the revision conferences of Brussels (1897 and 1900) and Washington. all those earlier Acts are still of significance. (1911). the national treatment rule applies to all advantages that the various national laws grant to nationals. each country party to the Paris Convention must grant the same protection to nationals of the other member countries as it grants to its own nationals.13 The national treatment rule applies first of all to the “nationals” of the member countries. Generally.C. 5. as regards the protection of industrial property. a third category defines a certain number of common rules in the field of substantive law which contain either rules establishing rights and obligations of natural persons and legal entities. Law and Use a revised Act of the Paris Convention.9 The provisions of the Paris Convention may be sub-divided into four main categories: a first category contains rules of substantive law which guarantee a basic right known as the right to national treatment in each of the member countries.11 The same national treatment must be granted to nationals of countries which are not party to the Paris Convention if they are domiciled in a member country or if they have a “real and effective” industrial or commercial establishment in such a country. Without this.12 This national treatment rule guarantees not only that foreigners will be protected. or rules requiring or permitting the member countries to enact legislation following those rules. D. and includes the final clauses of the Convention. it would frequently be very difficult and sometimes even impossible to obtain adequate protection in foreign countries for inventions.242 WIPO Intellectual Property Handbook: Policy. Legal entities created under the private law of a member country will usually be considered a national of that country. although the great majority of the countries are now party to the latest Act. which are no longer in force. However. a fourth category deals with the administrative framework which has been set up to implement the Convention. There is of course no doubt that State-owned enterprises of a member country or other entities created under the public law of such country are to be considered as nationals of the member country concerned. The term “national” includes both natural persons and legal entities. but also that they will not be discriminated against in any way. The relevant provisions are contained in Articles 2 and 3 of the Convention. 5. . a second category establishes another basic right known as the right of priority. they may also be considered a national of the headquarters country. no nationality as such is granted to legal entities by the various national laws. With respect to legal entities.

these later applications enjoy a priority status with respect to all applications relating to the same invention filed after the date of the first application.20 The right of priority means that. These later applications will then be regarded as if they had been filed on the same day as the earliest application.19 If there is no domicile. Supposing that a given member country has a longer term of patent protection than another member country: the former country will not have the right to provide that nationals of the latter country will enjoy a term of protection of the same length as the term of protection is in the law of their own country. An example is a requirement for foreigners to deposit a certain sum as security or bail for the costs of litigation.17 Article 3 provides for the application of the national treatment rule also to nationals of non-member countries. A mere residence. if they are domiciled or have an industrial or commercial establishment in a member country. They also enjoy a priority status with respect to all acts accomplished after that date which would normally be apt to destroy the rights of the applicant or the patentability of his invention. This principle applies not only to codified law but also to the practice of the courts (jurisprudence). that any requirement of reciprocity of protection is excluded. Hence. The applicant is not required to present all applications at home and in foreign . A mere letter box or the renting of a small office with no real activity is not sufficient. apply for protection in all the other member countries.14 This means furthermore. These rights are expressly reserved. It requires that there must be actual industrial or commercial activity. The national treatment principle must be applied without prejudice to such rights. to jurisdiction and to requirements of representation is expressly “reserved. The notion of the industrial or commercial establishment in a member country of a national of a non-member country is further qualified by the text of the Convention itself. the same applicant (or its or his successor in title) may.21 The right of priority offers great practical advantages to the applicant desiring protection in several countries.International Treaties and Conventions on Intellectual Property 243 5. within a specified period of time (six or 12 months). Another example is expressly stated: the requirement that foreigners should either designate an address for service or appoint an agent in the country in which protection is requested. The Right of Priority 5. and to the practice of the Patent Office or other administrative governmental institutions as it is applied to the nationals of the country. 5. 5.15 The application of the national law to the national of another member country does not. is sufficient.18 The term “domiciled” is generally interpreted not only in the strict legal sense of the term. 5. on the basis of a regular application for an industrial property right filed by a given applicant in one of the member countries. Legal entities are domiciled at the place of their actual headquarters. 5. This latter is perhaps the most common special requirement imposed on foreigners. 5.” This means that certain requirements of a mere procedural nature which impose special conditions on foreigners for purposes of judicial and administrative procedure. The national law relating to judicial and administrative procedure.16 Article 2(3) states an exception to the national treatment rule.Chapter 5 . The provisions concerning the right of priority are contained in Article 4 of the Convention. prevent him from invoking more beneficial rights specially provided in the Paris Convention. 5. however. there may still be an industrial or commercial establishment which gives a person the right to national treatment. may also validly be invoked against foreigners who are nationals of member countries. more or less permanent as distinct from a legal domicile.

29 In terms of concrete examples. It is therefore not possible to follow a first application by a second. This allows in particular also the transfer of the right of priority to different persons for different countries. as this could. is a valid basis for the right of priority.28 The effect of the right of priority is regulated in Article 4B. the later application must be treated as if it had been filed already at the time of the filing. considerably prolong the term of protection for that subject.26 The first application must be “duly filed” in order to give rise to the right of priority. abandonment or rejection of the first application does not destroy its capacity to serve as a priority basis. Law and Use countries at the same time. all the acts accomplished during the time between the filing dates of the first and the later applications.23 The right of priority can be based only on the first application for the same industrial property right which must have been filed in a member country. although it was filed before the later application. since he has six or 12 months at his disposal to decide in which countries to request protection. A regular national filing means any filing that is adequate to establish the date on which the application was filed in the country concerned. which is the subject of the later application. however. 5.25 The later application must concern the same subject as the first application the priority of which is claimed. utility model. Any filing.24 Article 4A(l) of the Paris Convention recognizes expressly that the right of priority may also be invoked by the successor in title of the first applicant.22 The beneficiary of the right of priority is any person entitled to benefit from the national treatment rule who has duly filed an application for a patent for invention or another industrial property right in one of the member countries.27 Withdrawal. during the priority period would not destroy the novelty or inventive character of that invention. which is equivalent to a regular national filing. 5. as a consequence of the priority claim. In other words. 5. One can summarize this effect by saying that. . possibly improved application and then to use that second application as a basis of priority. It is. a publication or public use of the invention. By virtue of the right of priority. the same invention. The same change of form of protection in both directions may also be possible. in another member country. between utility models and industrial designs. The right of priority may be transferred to a successor in title without transferring at the same time the first application itself. The reason for this rule is obvious: one cannot permit an endless chain of successive claims of priority for the same subject. The right of priority subsists even where the first application generating that right is no longer existent. cannot destroy the rights which are the subject of the later application. in fact. 5. 5. the so-called priority period. this means that a patent application for the same invention filed by a third party during the priority period will not give a prior right. a practice which is quite common. 5. The applicant can use that period to organize the steps to be taken to secure protection in the various countries of interest in the particular case. 5. of the first application the priority of which is claimed. The notion of “national” filing is qualified by including also applications filed under bilateral or multilateral treaties concluded between member countries. in accordance with national laws. 5. It is insignificant for that purpose whether that publication is made by the applicant or the inventor himself or by a third party. trademark or industrial design must be the subject of both applications. Likewise. possible to use a first application for a patent for invention as priority basis for a registration of a utility model and vice versa.244 WIPO Intellectual Property Handbook: Policy.

In this respect. each of which pertaining to different features of the subject matter of the later application. 5. when filing before the end of the priority year in another member country. elements for which priority is claimed may be combined with elements for which no priority is claimed.32 These possibilities correspond to a practical need. the later application must of course comply with the requirement of unity of invention.Chapter 5 . the Paris Convention had to take into account the conflicting interests of the applicant and of third parties. Provisions Concerning Patents Independence of Patents 5. on a ground which does not exist in the laws of the other countries. in any other country. Frequently after a first filing further improvements and additions to the invention are the subject of further applications in the country of origin. or as a consequence of the patent’s invalidation in that country. but it may also combine the priority of several earlier applications. including non-member countries. The rule concerning the “independence” of patents for invention is contained in Article 4bis. In all these cases. or that it is no longer maintained or has terminated. It means that the grant of a patent for invention in one country for a given invention does not oblige any other member country to grant a patent for invention for the same invention.” Therefore. the principle means that a patent for invention cannot be refused. in the later application. This provision requires that a patent granted on an application which claimed the priority of one or more foreign applications. A decision not to grant or to invalidate a patent for invention in a particular country on the basis of its law will frequently not have any bearing on the different legal situation in the other countries.30 The length of the priority period is different according to the various kinds of industrial property rights. 5.33 Patents for invention granted in member countries to nationals or residents of member countries must be treated as independent of patents for invention obtained for the same invention in other countries. for industrial designs and trademarks it is six months. it is very practical to be able to combine these various earlier applications into one later application. on the ground that he or she lost a patent in a given country as a consequence of not having paid an annual fee in that country.34 This principle is to be understood in its broadest sense. It would not be justified to make the owner lose the patent for invention in other countries.31 The right of priority as recognized by the Convention permits the claiming of “multiple priorities” and of “partial priorities. 5. Furthermore.36 A special feature of the principle of independence of patents for invention is contained in Article 4bis(5).International Treaties and Conventions on Intellectual Property 245 5. invalidated or otherwise terminated in any member country on the ground that a patent for invention for the same invention has been refused or invalidated. 5.35 The underlying reason and main argument in favor of this principle is that national laws and administrative practices are usually quite different from country to country. The priority periods now prescribed by the Paris Convention seem to strike an adequate balance between them. the later application may not only claim the priority of one earlier application. the fate of a particular patent for invention in any given country has no influence whatsoever on the fate of a patent for the same invention in any of the other countries. In such cases. 5. This combination is even possible if the multiple priorities come from different member countries. In determining the length of the priority period. Furthermore. must be given the same duration which it would have . For patents for invention and utility models the priority period is 12 months.

) is left for the national legislation and courts to decide. This provision is quite narrowly worded.246 WIPO Intellectual Property Handbook: Policy.37 A general rule states that the inventor must have the right to be mentioned as such in the patent for invention. and not from the filing date of the application in the country.42 With respect to the goods that are imported. a provision in a national law starting the term of the patent for invention from the (foreign) priority date. In such a case. The fact that the goods. annulment. repeal. the provision states that importation by the patentee. of articles covered by the patent and manufactured in any of the countries of the Union will not entail forfeiture of the patent. it is not permitted to deduct the priority period from the term of a patent invoking the priority of a first application. would be in violation of this rule. Consequently the countries of the Union have considerable leeway to legislate with respect to importation of patented goods under any of the circumstances which are different to those foreseen in this provision. in the light of the purpose of this Article or the spirit of the Paris Convention. The Right of the Inventor to be Mentioned 5. it may be mentioned that the term “forfeiture” in Article 5A(1) includes any measure which has the effect of definitively terminating the patent. 5.43 Finally. into the country where the patent has been granted. would not prevent this Article from being applicable. Whether “forfeiture” may.44 With respect to the working of patents and compulsory licenses. and hence only applies when several conditions are met. the term “patentee” would also cover the representative of the patentee. Others — and that tendency seems to be increasing — enforce the naming of the inventor during the procedure for the grant of a patent for invention on an ex officio basis. suspension of rights. import to this country goods (covered by the patent) which were manufactured in another country of the Union. it is even required that the applicant for a patent be the inventor himself. are dealt with in Article 5A of the Convention. In this context. 5.39 The questions of importation of articles covered by patents. This is stated in Article 4ter. etc. In the United States of America. Therefore it would cover the concepts of invalidation.41 This Article applies to patentees who are entitled to benefit from the Paris Convention and who. having been manufactured in a country of the Union. 5.38 National laws have implemented this provision in several ways. etc. or any person who effects the importation in the name of such patentee. the essence of the provisions contained in Article 5A is that each country may take legislative measures providing for . be construed as covering also other measures that would have the effect of preventing importation (fines. 5. In other words. For instance. it suffices that they be manufactured in a country of the Union. Importation. Failure to Work and Compulsory Licenses 5. the patent granted in the country of importation may not be forfeited as a sanction for such importation.40 With respect to importation. of failure to work the patented invention and of compulsory licenses. 5. revocation. are thereafter circulated through other countries and eventually imported from a country which is not a member of the Union. having a patent in one of the countries of the Paris Union. for example. Some give the inventor only the right for civil action against the applicant or owner in order to obtain the inclusion of his name in the patent for invention. Law and Use according to the national law if no priority had been claimed. 5.

Such other types may be granted to prevent other abuses. if he can give legitimate reasons for his inaction — for example. The patent owner must retain the right to grant other non-exclusive licenses and to work the invention himself. The applicable time is the one which.52 There are also cases where a compulsory license is provided for to protect the public interest in unhampered technological progress. it is bound to that enterprise and cannot be transferred separately from that enterprise. They are expressly dealt with by Article 5A. The time limit of three or four years is a minimum also in the sense that national law can provide for a longer time limit. 5. Working in all countries is generally not economical. Moreover. in cases where there is no abuse by the patent owner of his rights — for example. They should rather be used to introduce the use of the new technology into the country.47 Compulsory licenses for failure to work or insufficient working of the invention may not be requested before a certain period of time has elapsed.49 The compulsory license for non-working or insufficient working must be a non-exclusive license and can only be transferred together with the part of the enterprise benefiting from the compulsory license. namely. as the compulsory license has been granted to a particular enterprise on the basis of its known capacities. to ensure sufficient working of the invention in the country.48 The time limit of three or four years is a minimum time limit. is first of all an economic consideration and then also a question of time.45 Compulsory licenses on the ground of failure to work or insufficient working are the most common kind of coercive measure against the patent owner to prevent abuses of the rights conferred by the patent for invention.50 All these special provisions for compulsory licenses in Article 5A(4) are only applicable to compulsory licenses for non-working or insufficient working. that legal. 5. the request for a compulsory license must be rejected. These limitations are intended to prevent a compulsory licensee from obtaining a stronger position on the market than is warranted by the purpose of the compulsory license. This is the case of the compulsory license in favor of the . Moreover. for example failure to work or insufficient working. 5. expires last. in order to promote the industrialization of the country. 5. 5.International Treaties and Conventions on Intellectual Property 247 the grant of compulsory licenses. economic or technical obstacles prevent working. 5. These compulsory licenses are intended to prevent the abuses which might result from the exclusive rights conferred by a patent for invention. in the individual case. excessive prices or unreasonable terms for contractual licenses or other restrictive measures which hamper industrial development. This time limit expires either four years from the date of filing of the patent application or three years from the date of the grant of the patent for invention. Article 5A therefore tries to strike a balance between these conflicting interests. Whether the patent owner can really be expected to do so.46 The main argument for enforcing working of the invention in a particular country is the consideration that. If that is proven. or working more intensively. 5. at least for a certain period. The patent owner must be given a longer time limit.Chapter 5 . it is generally recognized that immediate working in all countries is impossible. 5. for example. in the fields of military security or public health. They are not applicable to the other types of compulsory licenses for which the national law is free to provide. patents for invention should not be used merely to block the working of the invention in the country or to monopolize importation of the patented article by the patent owner.51 Compulsory licenses may also be granted for reasons of the public interest. the invention in the country.

as of the original due date of the annuity. that is. In that case.58 Another common rule of substantive importance.56 In most countries the maintenance of certain industrial property rights. 5. Grace Period for the Payment of Maintenance Fees 5. Temporary or accidental entry of the patented device into the country in such cases constitutes no infringement of the patent for invention.53 All these other types of compulsory licenses can be grouped together under the general heading of compulsory licenses in the public interest. . For patents. he may in turn be obliged to grant a license to the owner of the earlier patent for invention. that Article 31 of the TRIPS Agreement further provides a number of conditions with respect to the use of subject matter of a patent without the authorization of the right-holder. Immediate loss of the patent for invention in the event that one annuity is not paid at the due date would be too harsh a sanction. aircraft or land vehicles through a member country in which such device is patented. If the payment is not made during the grace period. During the grace period.55 Article 5bis provides for a grace period for the payment of maintenance fees for industrial property rights and deals with the restoration of patents for invention in case of non-payment of fees. That period is six months. containing a limitation of the rights of the patent owner in special circumstances. This means in particular that compulsory licenses in the public interest can be granted without waiting for the expiration of the time limits provided for compulsory licenses that relate to failure to work or insufficient working. If a patented invention cannot be worked without using an earlier patent for invention granted to another person. in certain circumstances. the Paris Convention provides for a period of grace. If the owner of the dependent patent for invention obtains the compulsory license. is contained in Article 5ter. It deals with the transit of devices on ships. during which the payment can still be made after the due date to maintain the patent. 5. Law and Use so-called dependent patents. and in that case are also called annuities.59 Where ships. 5. both the delayed fee and the surcharge must be paid within the grace period. the patent for invention remains provisionally in force. leaving countries free to accept a longer period. Therefore. however. 5.248 WIPO Intellectual Property Handbook: Policy. 5. the owner of the means of transportation is not required to obtain prior approval or a license from the patent owner. may have the right to request a compulsory license for the use of that invention. mainly the rights in patents for invention and trademarks. Patents in International Traffic 5. is subject to the periodical payment of fees.54 It should be noted. and is established as a minimum period. aircraft or land vehicles of other member countries enter temporarily or accidentally a given member country and have on board devices patented in that country.57 The delayed payment of the annuity may be subjected to the payment of a surcharge. the maintenance fees must generally be paid annually. National laws are not prevented by the Paris Convention from providing for such compulsory licenses. and they are not subject to the restrictions provided for in Article 5A. then the owner of the dependent patent. the patent for invention will lapse retroactively.

60 The device on board the ship. a display of the invention at an international exhibition will not destroy the novelty of the invention. It would be maintained for a certain period from that date.66 Article 11 applies only to official or officially recognized exhibitions. “use” is generally understood as meaning the sale of goods . aircraft or vehicle must be in the body. The interpretation of that term is left to the member country where protection is sought. gear or other accessories of the conveyance. say. 5.International Treaties and Conventions on Intellectual Property 249 5. This priority right would start from the date of the opening of the exhibition or from the date of the introduction of the object at the exhibition. based on the exhibition.63 The principle stated in Article 11 is that the member countries are obliged to grant. 5. This means in particular that the person exhibiting the invention must be protected against any copying or usurpation of the invention for purposes of a patent application by a third party. the trademark may be expunged from the register. similar to that provided for in Article 4. in particular with respect to patents for invention. twelve months before the filing or priority date of a patent application. contained in Article 11 of the Convention. temporary protection to patentable inventions. by third parties.64 Temporary protection may be provided by various means. 5. When choosing that solution.Chapter 5 .62 A further common rule of a substantive nature is the provision concerning temporary protection in respect of goods exhibited at international exhibitions. The owner of the invention must also be protected against disclosure. For this purpose. it is important to protect the inventor or other owner of the invention during the same period also against abusive acts of third parties. It does not allow the making of patented devices on board a means of transportation. 5. An interpretation corresponding to the spirit of Article 11 is to consider an exhibition “official” if it is organized by a State or other public authority. in conformity with their domestic legislation. Inventions Shown at International Exhibitions 5. nor the sale to the public of patented products or of products obtained under a patented process.61 The provision covers only the use of patented devices. in the machinery. once registered. utility models. One is to grant a special right of priority. tackle. say 12 months. (2) and (3).65 Another means which is found in a number of national laws. be used within a certain period.67 The Convention touches on the issue of the use of marks in Article 5C(1). 5. Some of the countries which provide for the registration of trademarks also require that the trademark. and to consider it “international” if goods from various countries are exhibited. and would expire if the application for protection does not follow the exhibition within that period. and must be used exclusively for operational needs. industrial designs and trademarks in respect of goods exhibited at official or officially recognized international exhibitions held in the territory of any member country. 5. Provisions Concerning Trademarks Use of Trademarks 5.68 Article 5C(1) relates to the compulsory use of registered trademarks. is that of prescribing that. to consider it “officially recognized” if it is not official but has at least been recognized as official by a State or other public authority. during a certain period of. If this use is not complied with.

Grace Period for the Payment of Renewal Fees 5. The purpose of this provision is to allow for unessential differences between the form of the mark as it is registered and the form in which it is used. 5. for example if importation of the marked goods had been prohibited or delayed by governmental regulations. The Article states that where compulsory use is required. This rule applies also to differences in the form of the mark as used in the country of its original registration.70 The trademark owner’s justification of non-use would be acceptable if it were based on legal or economic circumstances beyond the owner’s control.72 Whether in a given case the differences between the mark as registered and the mark as actually used alter the distinctive character is a matter to be decided by the competent national authorities. Law and Use bearing the trademark. shall not entail invalidation of the registration nor diminish the protection granted to the mark. 5. although national legislation may regulate more broadly the manner in which use of the trademark is to be complied with. A failure to renew the registration will normally entail the lapse of the registration. except where the said use results in misleading the public or is contrary to the public interest. since it is by renewal that trademark registrations (and hence the rights that depend on such registrations) may be maintained.69 The definition of what is meant by “reasonable period” is left to the national legislation of the countries concerned. Such cases could occur if the concurrent use misleads the public as to the origin or source of the goods sold under the same trademark. or otherwise to the authorities competent for resolving such cases. In the case of trademarks this provision concerns primarily the payment of renewal fees. These cases are left for the national legislation of the various countries to regulate. Concurrent Use of the Same Trademark by Different Enterprises 5. or if the quality of such goods differs to the point where it may be contrary to the public interest to allow the continuation of such use. in a form differing in elements which do not alter the distinctive character of the mark as it was when formerly registered in one of the countries of the Union. for instance when use is made concurrently by the owner and a licensee or a franchisee. 5. for example in cases of adaptation or translation of certain elements for such use. 5. however. and in some cases the expiration of the right to the .75 Article 5bis requires that a period of grace be allowed for the payment of fees due for the maintenance of industrial property rights. cover the case of concurrent use of the mark by enterprises which are not co-proprietors of the mark. It is provided that such concurrent use will not impede the registration of the trademark nor diminish the protection in any country of the Union.250 WIPO Intellectual Property Handbook: Policy. 5. and then only if the owner does not justify such failure. the trademark’s registration may be cancelled for failure to use the trademark only after a reasonable period has elapsed. considering that in many cases the owner has to use his mark in several countries.73 Article 5C(3) of the Convention deals with the case where the same mark is used for identical or similar goods by two or more establishments considered as co-proprietors of the trademark.74 This provision does not. This reasonable period is intended to give the owner of the mark enough time and opportunity to arrange for its proper use.71 The Convention also establishes in Article 5C(2) that the use of a trademark by its proprietor.

including the country of origin. Therefore no action with respect to the mark in the country of origin may be required as a prerequisite for obtaining a registration of the mark in that country.81 Finally. In this respect. registration or renewal of the same mark in the country of origin of the mark. Article 6 states that a mark duly registered in a country of the Union shall be regarded as independent of marks registered in the other countries of the Union. the registration will lapse with retroactive effect to the original date of expiration. and in particular the independence of trademarks filed or registered in the country of origin from those filed or registered in other countries of the Union. since their registration and maintenance will depend only on each domestic law. 5. 5. This provision lays down the express rule that obtaining and maintaining a trademark registration in any country of the Union may not be made dependent on the application.Chapter 5 . This means that a mark once registered will not be automatically affected by any decision taken with respect to similar registrations for the same marks in other countries.77 During the period of grace. a country of the Union may apply only its domestic legislation when determining the conditions for the filing and registration of the mark. registration or renewal of the mark has not been effected in the country of origin. the registration remains provisionally in force. The period of grace provided by the Convention is intended to diminish the risks of a mark being lost by an involuntary delay in the payment of the renewal fees. Well-Known Trademarks 5. on the ground that filing. the countries are free to provide for a period of grace longer than the minimum six months prescribed by the Convention. Regardless of the origin of the mark whose registration is sought.78 Article 6 of the Convention establishes the important principle of the independence of trademarks in the different countries of the Union. filed in any country of the Union by a person who is entitled to the benefits of the Convention. the fact that one or more such similar registrations are. 5. may not be refused.80 This Article also provides that an application for the registration of a mark. but are free to provide for the payment of a surcharge when such renewal fees are paid within the period of grace. If the payment of the renewal fees (and surcharge where appropriate) is not made during the period of grace. nor may a registration be canceled. The protection of the well-known . The application of the principle of national treatment asserts the rule of independence of marks. affect the registrations of the mark in other countries. cancelled or abandoned will not.82 The Convention deals with well-known trademarks in Article 6bis. The validity of these registrations will depend only on the provisions applicable in accordance with the legislation of each of the countries concerned.International Treaties and Conventions on Intellectual Property 251 mark. The effect of this Article is to extend protection to a trademark that is well-known in a member country even though it is not registered or used in that country.79 The first part of Article 6 states the application of the basic principle of national treatment to the filing and registration of marks in the countries of the Union. 5. renounced. This Article obliges a member country to refuse or cancel the registration and to prohibit the use of a trademark that is liable to create confusion with another trademark already well known in that member country.76 The countries of the Paris Union are obliged to accord a period of grace of at least six months for the payment of the renewal fees. Independence of Trademarks 5. 5. for example. eo ipso. Moreover.

5. - State Emblems.86 The protection of a well-known trademark under Article 6bis results from the obligation of a member country to take ex officio. Similarly. yet that trademark may be well-known in the country because of publicity there or the repercussions in that country of advertising in other countries. the following type of action: first. The registration or use of a confusingly similar trademark would.88 The purpose of Article 6ter is not to create an industrial property right in favor of the State or the intergovernmental organization in respect of the distinctive signs concerned. prohibition of the use of the conflicting trademark. who would be misled by the use of a conflicting trademark for the same or identical goods than those in connection with which the well-known trademark is registered. 5. the request for which may be within a period of time prescribed by a member country. nationals of any member . third. or at the request of an interested party. in most cases. 5. which prevents the registration or use of a conflicting trademark. the competent authorities of an intergovernmental organization may allow others to use its distinctive signs as trademarks.89 The provisions of Article 6ter do not apply if the competent authorities of the member country allow the use of its distinctive signs as trademarks.83 The protection of well-known trademarks is deemed justified on the grounds that a trademark that has acquired goodwill and a reputation in a member country ought to give rise to a right for its owner. cancellation of the registration of a conflicting trademark. Law and Use trademark results not from its registration. as determined by the administrative or judicial authorities of the country in which protection is claimed. This Article obliges a member country.87 The Convention deals with distinctive signs of States and international intergovernmental organizations in Article 6ter. refusal of the application for registration of the conflicting trademark. where its legislation so permits. in the case of the distinctive signs of a member country. however. Moreover. amount to an act of unfair competition and be prejudicial to the interests of the public. in certain circumstances. second. either as trademarks or as elements of trademarks. to refuse or invalidate the registration and to prohibit the use. no time limit may be fixed for such a request in the case of a conflicting trademark used in bad faith. but simply to prevent the use of those signs as trademarks in industrial or commercial activities. 5. registered or used for identical or similar goods. allowing at least a period of five years from the date of registration within which a request for cancellation of the conflicting trademark may be made. in the sense that goods bearing that trademark have not been sold there. Official Hallmarks and Emblems of International Organizations 5. 5. unless that trademark was registered in bad faith.85 The protection of a well-known trademark under Article 6bis exists only where the conflicting trademark has been filed. as determined in a member country by its competent administrative or judicial authorities. 5. A trademark may not have been used in a country.84 The trademark that is protected by Article 6bis must be a “well-known” trademark. but from the mere fact of its reputation.252 WIPO Intellectual Property Handbook: Policy. of the distinctive signs specified in that Article of member countries and certain international intergovernmental organizations. in which event no time limit may be fixed.

the public may be misled as to the origin or essential qualities of similar goods to which the assignor and assignee will apply the same trademark independently.94 Some national legislations allow an assignment without a simultaneous or corresponding transfer of the enterprise to which the trademark belongs.International Treaties and Conventions on Intellectual Property 253 country that are authorized to use the distinctive signs of their country may do so even if those signs are similar to those of another member country. the Convention establishes a special rule for the benefit of owners of trademarks registered in their country of origin. 5. for the validity of the assignment of the trademark.91 The objective of the provisions of Article 6ter.93 Article 6quater of the Convention deals with the assignment of trademarks. 5. particularly as regards important features of the goods to which the trademark is applied. that the portion of the business or goodwill located in that country be transferred to the assignee. official signs and hallmarks indicating control and warranty and any imitation of those signs from a heraldic point of view. but such a requirement must not extend to parts of the enterprise that are located in other countries. a member country is free to require. 5. might mislead the public with respect to the origin of the goods to which such marks would be applied. In such cases. which in turn transmits those communications to all the member countries. or to sell therein.Chapter 5 . if the use of that trademark by the assignee would be of such a nature as to mislead the public. 5. for example. 5. Others make the validity of the assignment depend on the simultaneous or corresponding transfer of the enterprise. the simultaneous transfer of the enterprise to which the trademark belongs. This freedom may be exercised. is to exclude the registration and use of trademarks that are identical or present a certain similarity to the armorial bearings. flags or other emblems of States. This exceptional rule is governed by Article 6quinquies of the Convention. insofar as the distinctive signs of States are concerned. if a trademark is assigned for part only of the goods to which it is applied. together with the exclusive right to manufacture in the said country.90 The distinctive signs of States that are referred to in Article 6ter are the following — armorial bearings. 5. a procedure is established pursuant to that Article whereby the distinctive signs of the member countries and intergovernmental organizations concerned are communicated to the International Bureau of WIPO. Thus. the goods bearing the trademark assigned. and if those goods are similar to other goods for which the trademark is not assigned. .96 It should be noted that Article 6quater leaves a member country free not to regard as valid the assignment of a trademark with the relevant part of the enterprise. Such registration would violate the right of the State to control distinctive signs of its sovereignty and.92 To give effect to the provisions of Article 6ter. Protection of Trademarks Registered in one Country of the Union in other Countries of the Union 5.97 Parallel to the principle of independence of marks which is embodied in the provisions of Article 6. further. Assignment of Trademarks 5. flags and other emblems.95 Article 6quater states that it shall suffice for the recognition of the validity of the assignment of a trademark in a member country. The rule of Article 6quater arises because of the situation where a trademark is used by an enterprise in various countries and it is desired to make a transfer of the right to the trademark in one or more of those countries.

there are some important differences in the domestic legislation of the member countries regarding the registration of trademarks. such as the right to a trade name or a copyright. Article 6quinquies of the Paris Convention establishes certain effects where registration in the country of origin has taken place and is invoked in another member country where registration and protection is sought. the country of origin must be a country of the Union in which the applicant has a real and effective industrial or commercial establishment or. 5.254 WIPO Intellectual Property Handbook: Policy.102 The rule established by Article 6quinquies provides that a trademark which fulfils the required conditions must be accepted for filing and protected — as is (to use the expression found in the English version) or telle quelle (to use the expression adopted in the original French text) — in the other member countries. or is purely descriptive. alternatively. 5. it is in the interest of both owners of trademarks and the public to have the same trademark apply to the same goods in various countries.106 The second permitted ground for refusal or invalidation is when the trademark is devoid of distinctive character. subject to certain exceptions.98 The provisions of Article 6quinquies come into operation in the case where a registration in the country of origin is invoked in the country where protection is sought. 5. This rule is often called the “telle quelle” principle. 5.105 The first permitted ground for refusal or invalidation of a trademark exists where the trademark infringes rights of third parties acquired in the country where protection is claimed. the differences in domestic legislation could prevent this uniform use of the same trademark. If. 5. 5. However. or consists of a generic name. the list does not exclude any ground for refusal of protection for which there is a need in national legislation. the rule in this Article does not affect the questions relating to the nature or the function of the trademarks as conceived in the countries where protection is sought. Thus a member country is not obliged to register and extend protection to subject matter that does not fall within the meaning of a trademark as defined in the law of that country. the country of the Union of which he is a national. Moreover. .99 There are two main reasons for this special rule. This provision has the effect of bringing about a certain uniformity of the law of the various countries as to the concept of trademarks.101 For Article 6quinquies to apply it is necessary that the trademark concerned should be duly registered in the country of origin. under the law of a member country. On the other hand. a three-dimensional object or musical notes indicating tunes is not considered a trademark in that country. 5.104 Article 6quinquies. in which he has his domicile. or otherwise. Whereas the principle of national treatment of applications calls for the normal rule of complete independence of trademarks (as recognized in Article 6). On the one hand. Law and Use 5. for example. providing for extraterritorial effects of the registration in the country of origin. in the exceptional situation regulated by Article 6quinquies the opposite rule prevails. Section B. contains certain exceptions to the obligation of accepting a registered trademark “as is” for registration in the other countries of the Union.103 It is to be noted that the rule only concerns the form of the trademark. In this respect. As a consequence. 5. A mere filing or use of the trademark in that country is not sufficient.100 In order to diminish the impact of those differences on the registration of trademarks in respect of goods in international trade. These rights can be either rights in trademarks already protected in the country concerned or other rights. it is not obliged to accept that subject matter for registration and protection. That list of exceptions is exhaustive so that no other grounds may be invoked to refuse or invalidate the registration of the trademark.

5. in its laws against unfair competition. . laundries and cleaners. the only difference being that they apply to services instead of products or goods. Nature of the Goods to which a Trademark is Applied 5. but also by granting such protection by other means. 5. employment agencies.Chapter 5 .112 By virtue of Article 6sexies. 5. However. etc. A member country may comply with the provision not only by introducing special legislation for the protection of service marks. as considered in the country where protection is claimed.109 A fifth and last permissible ground for refusal or invalidation exists where the trademark is used by the owner in a form which is essentially different from that in which it has been registered in the country of origin. Article 6septies confers upon the owner of a trademark the right to oppose the unauthorized use of the trademark by his agent or representative. This Article regulates those cases where the agent or representative of the person who is the owner of a trademark applies for or obtains the registration of a trademark in his own name. 5.115 Article 7 of the Convention stipulates that the nature of the goods to which a trademark is to be applied shall in no case be an obstacle to the registration of the mark. Thus service marks have the same function as trademarks. in order to distinguish their services from those of other enterprises. whether or not application for registration of the trademark has been made or its registration has been granted. member countries undertake to protect service marks. 5. This provision does not oblige a member country to legislate expressly on the subject of service marks. This ground includes. for example. Article 6septies confers upon the owner of the trademark the right to oppose the registration or to demand cancellation of the registration or.113 Article 6septies of the Convention deals with the relationship between the owner of a trademark and his agent or representative regarding registration or use of the trademark by the latter. as a special category. a member country is free to apply the same rules it applies for trademarks also to service marks in analogous situations or circumstances.111 Article 6sexies was introduced into the Paris Convention in 1958 to deal specifically with service marks.108 A fourth permissible ground for refusal or invalidation exists if the registration of the trademark would constitute an act of unfair competition. but are not required to provide for the registration of such marks.110 A service mark is a sign used by enterprises offering services. restaurants.107 The third permissible ground for refusal or invalidation exists where the trademark is contrary to morality or public order..International Treaties and Conventions on Intellectual Property 255 5. without the owner’s authorization. In addition. Service Marks 5. for example. if the national law so allows. hotels. or uses a trademark. tourist agencies. Registration in the Name of the Agent without the Proprietor’s Authorization 5. to demand an assignment of the registration in his favor. but the revision Conference did not accept a more ambitious proposal to assimilate service marks to trademarks entirely. airlines. Unessential differences may not be used as grounds for refusal or invalidation. car-rental agencies. trademarks which are of such a nature as to deceive the public.114 In such cases.

123 The provision concerning marks shown at international exhibitions is contained in Article 11 of the Convention. The owner may be either an association of which those enterprises are members or any other entity. 5.120 Article 7bis of the Convention deals with collective marks. Trademarks Shown at International Exhibitions 5. Article 7bis adds a further stipulation that the association may not even be required to possess an industrial or commercial establishment anywhere. distributors.118 In all such cases. mode of manufacture. . do not conform to the safety requirements of the law of a particular country. region or locality or that have other common characteristics. manufacturers.256 WIPO Intellectual Property Handbook: Policy. on the basis of an examination of the food product or of clinical trials as to the effect of the use of the pharmaceutical product on human beings or animals. The association does not have to prove that it conforms to the legislation of its country of origin. In other words. which also applies to other titles of industrial property.116 The purpose of this rule. For instance. including a public body. and also the comparable rule in Article 4quater regarding patents for invention. Law and Use 5. may be prejudicial to an applicant who wishes to make a timely filing for protection in another member country. or is not constituted according to the law of that country. for example. material. Collective marks of States or other public bodies are not covered by the provision. 5. without possessing any industrial or commercial establishment itself. 5.119 A collective mark may be defined as a sign which serves to distinguish the geographical origin.121 In order that Article 7bis be applicable. It obliges a member country to accept for filing and to protect. such approval. 5. is to make the protection of industrial property independent of the question whether goods in respect of which such protection would apply may or may not be sold in the country concerned.” These will generally be associations of producers. quality or other common characteristics of goods or services of different enterprises that simultaneously use the collective mark under the control of its owner. The safety or quality regulations may change and the product may be permitted for sale later on. collective marks belonging to “associations. Collective Marks 5.117 It sometimes occurs that a trademark concerns goods which. in accordance with the particular conditions set by that country.122 Refusal of registration and protection of the collective mark is not possible on the ground that the association is not established in the country where protection is sought. if imposed as a condition of filing or registration in that country. the food and drug laws of a country may prescribe requirements concerning the ingredients of a food product or the effects of a pharmaceutical product and allow its sale only after approval of the competent authorities. 5. sellers or other merchants. an association. of goods that are produced or manufactured in a certain country. the existence of the association to which the collective mark belongs must not be contrary to the law of the country of origin. it would be unjust to refuse registration of a trademark concerning such goods. but registration and protection of its collective mark may be refused if the existence of the association is found to be contrary to that legislation. may be one that simply controls the use of a collective mark by others. In those cases where no such change is contemplated but the approval of the competent authorities of the country concerned is still pending.

in conformity with their domestic legislation. in cases of failure to work or where articles corresponding to those protected are imported.126 In order to apply its national legislation regarding temporary protection. One is to grant a special right of priority. such as cancellation.127 The Paris Convention deals with industrial designs in Article 5quinquies. in whatever form of documentary evidence they consider necessary. which is found in certain national laws. 5.129 The normal solution. It is contained in Article 5B. Provisions Concerning Industrial Designs. provide other sanctions for those cases. “Forfeiture” in this provision includes equivalent measures. are both matters left to the national legislation of the countries concerned. “Working” means here the manufacture of products representing or incorporating the industrial design.124 The principle stated in Article 11 is that the member countries are obliged to grant.International Treaties and Conventions on Intellectual Property 257 5. however. Trade Names. whether or not they form part of a trademark.132 The definition of a trade name for the purposes of protection. Therefore. invalidation or revocation. 5. They can. 5. consists of the recognition of a right of prior use in favor of the exhibitor of the goods bearing the trademark as against possible rights acquired by third parties. and the manner in which such protection is to be afforded. both as to the identity of the goods exhibited and as to the date of their introduction at the exhibition. 5. Nothing is said about the way in which this protection must be provided. chosen by a great number of countries for compliance with the obligations under Article 5quinquies is. to provide for a special system of protection of industrial designs by registration or by the grant of patents for industrial designs.130 There is a special provision dealing with forfeiture in the case of industrial designs.131 Trade names are dealt with by the Convention in Article 8. also comply with this obligation through the grant of such protection under the law on copyright or the law against unfair competition. Appellations of Origin and Indications of Source and Unfair Competition Industrial Designs 5. . Member countries could. Another possibility for protection. however. the competent authorities of the country may require proof. 5.128 Member countries can therefore comply with this obligation through the enactment of special legislation for the protection of industrial designs. 5. however. Trade Names 5. This provision merely states the obligation of all member countries to protect industrial designs. similar to that provided for in Article 4.125 The temporary protection may be provided by various means. This Article states that trade names shall be protected in all the countries of the Union without the obligation of filing or of registration. and states that the protection of industrial designs may not in any circumstances be subject to any measure of forfeiture as a sanction. temporary protection to trademarks in respect of goods exhibited at official or officially recognized international exhibitions held in the territory of any member country. protection may result from special legislation on trade names or from more general legislation on unfair competition or the rights of personality.Chapter 5 . such as compulsory licenses in order to ensure working.

such a requirement and criterion could be applied by that member country. Moreover. producers and merchants to take action before the competent authorities with a view to the repression of the acts referred to above. However.. Article 10(2) states that any producer. etc. manufacture or trade in such goods established in the locality. region or country falsely indicated as the source or in the country where such false indications are used. whether a natural person or a legal entity. manufacturer or merchant. 5. However. which has the effect of conveying the notion that the goods bearing the indication originate in that country or place. These provisions cover in general any direct or indirect use of a false indication of the source (including.) or of cities (e. Examples of indications of source are the names of countries (e. if in a member country protection of trade names were dependent on the use of the name and to the extent that another trade name may cause confusion or prejudice with respect to the first trade name.g. is in any case deemed to be an interested party. manufacturer or merchant.138 The Paris Convention contains in Articles 10 and 10bis provisions on the protection of indications of source. Germany. the Madrid Agreement for the Repression of False or Deceptive Indications of Source on Goods and the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration). 5. Hong Kong.. engaged in the production. 5.g. Paris. In this connection. where applicable. etc. An appellation of origin is the geographical name of a country.136 Indications of source include any name. the appellation of origin) of the goods or the identity of the producer. both concepts have been distinguished. Article 10ter.135 Both these objects can be referred to under the broader concept of geographical indications.140 The Convention provides that action may be taken not only by the public prosecutor but also by any interested party. Appellations of Origin and Indications of Source 5.139 The Convention requires the countries to seize the goods bearing false indications or to prohibit their importation. region or locality which serves to designate a product originating therein. and for the purposes of certain special treaties (e.133 In no case can protection be made conditional upon filing or registration of the trade name. although traditionally. and may be considered a special type of indication of source.. 5.258 WIPO Intellectual Property Handbook: Policy.134 Appellations of origin and indications of source are included among the various objects of protection of industrial property under the Paris Convention (Article 1(2)). or otherwise to apply any other measures that may be available in order to prevent or stop the use of such indications. 5. requires the countries to enable federations and associations representing interested industrialists. Japan. 5. the obligation to seize goods on importation only applies to the extent that such a sanction is provided for under the national law.g. sign or other indication which refers to a given country or to a place located therein.137 Appellations of origin have a more limited meaning. designation.) when used on or in connection with goods in order to indicate their place of manufacture or their provenance. the quality and characteristics of which are due exclusively or essentially to the geographical environment. . as well as any act of unfair competition by the use of indications or allegations which are liable to mislead the public as to the nature or the characteristics of the goods for which they are applied. including natural and human factors. Law and Use 5.

in their relations with it. the manufacturing process. leaving this to the laws existing in each of the member countries. This provision may be distinguished from the previous cases to the extent that it is concerned with the interests and well-being of the public and is one of the provisions in the Convention that is more directly related to the consumer protection role of industrial property. 5. the Article gives some typical examples of acts of unfair competition which should be prohibited in particular.146 The countries party to the Paris Convention constitute a “Union” for the Protection of Industrial Property. and in what circumstances. which could be attacked as an infringement of proprietary rights. the characteristics.142 Article 10bis defines acts of unfair competition as those acts of competition which are contrary to honest practices in industrial or commercial matters. the presentation or style used on products and on their corresponding outlets or points of distribution. 5. The Union forms a single administrative entity. that earlier Act which is the most recent of the Acts to which they are party. 5. a state which becomes a member of the Union by acceding to the most recent (the Stockholm) Act of the Paris Convention becomes bound with respect to all member countries.144 The second example relates to false allegations in the course of trade of such a nature as to discredit the establishment. These acts cover not only the use of identical or similar marks or names.145 The third example of acts of unfair competition concerns indications and allegations which are liable to mislead the public as to the nature.141 The Convention provides in Article 10bis that the countries of the Union are bound to assure to persons entitled to benefit from the Convention effective protection against unfair competition. the Paris Convention goes beyond a mere treaty establishing rights and obligations. It also establishes a legal entity in international law with the necessary organs to carry out certain tasks. etc. Administrative and Financial Provisions Organs of the Paris Union 5. In creating a Union. even those not yet party to it.Chapter 5 . Further. 5.143 The first example refers to all acts of such a nature as to create confusion by any means whatever with the establishment. discrediting allegations which are not strictly untrue may also be considered acts of unfair competition. . and an administrative link between the various Acts of the Paris Convention. the suitability for their purpose or the quality of their goods.International Treaties and Conventions on Intellectual Property 259 Unfair Competition 5. Such could be the form of packages. or the industrial or commercial activities of a competitor. 5.147 Under this concept of the Union. It has been left to the domestic legislation or case law of each country to decide whether. the goods or the industrial or commercial activities of a competitor. Article 27(3) of the Convention says that such a country must apply the Stockholm Act also to member countries of the Union not yet party to it. and must recognize that member countries not yet bound by the substantive provisions of the Stockholm Act may apply. titles of publicity. the goods. but also the use of other means which can create confusion. The Convention does not specify the manner in which such protection should be granted.

According to Article 18(2). it gives directions for the preparation of conferences of revision of the Convention. 5.152 The provisions concerning the International Bureau are contained in Article 15. It deals with all matters concerning the maintenance and development of the Union and the implementation of the Paris Convention. certain administrative changes are now under consideration (see under Constitutional Reform. such conferences must be held successively in one of the member countries. Each member country determines freely the class to which it wishes to belong. It prepares the meetings of the Assembly and takes all necessary measures to ensure the execution of the program. It consists of one-fourth of the countries members of the Assembly. The contributions are calculated in applying a class and unit system to the total sum of contributions needed for a given budgetary year. together with the General Assembly of WIPO. It deals with all the functions which have to be carried out during the period between the ordinary sessions of the Assembly and for which the Assembly is too big a body. is the chief executive of the Union.151 The Executive Committee is the smaller governing body of the Union. the Assembly. Chapter 1). The Assembly meets once in every second calendar year in ordinary session. the Director General of WIPO. and gives him instructions concerning matters within the competence of the Union. The Convention must be submitted to revision with a view to the introduction of amendments designed to improve the system of the Union. Law and Use 5. Finances 5. adopts the biennial budget of the Union and approves its final accounts.154 Article 18 contains the principle of periodical revision of the Paris Convention. Its head. the Executive Committee and the International Bureau of WIPO.153 The financial provisions are contained in Article 16. 5.155 The preparations for the conferences of revision of the Paris Convention are carried out by the International Bureau of WIPO in accordance with the directions of the Assembly and in .148 The Union has three administrative organs. 5. However.150 The Assembly has an Executive Committee. which is dealt with in Article 14. Amendments and Revision 5. 5. The highest class I corresponds to a share of 25 units. the lowest class VII to a share of one unit.260 WIPO Intellectual Property Handbook: Policy. together with the Coordination Committee of WIPO.149 The Assembly is dealt with in Article 13. In particular. it reviews and approves the reports and activities of the Director General of WIPO concerning the Union. The Assembly is the chief governing body of the Union in which all policymaking and controlling powers are vested. It performs all administrative tasks concerning the Union. These revisions are dealt with by diplomatic conferences of revision in which delegations appointed by the governments of the member countries participate. The Union has its own budget which is mainly financed by mandatory contributions from member countries. but it may also change class afterwards. The Executive Committee meets once a year in ordinary session. it determines the program. and is elected by the Assembly for the period between two ordinary sessions with due regard to an equitable geographical distribution. It provides the secretariat of the various organs of the Union. headed by the Director General of the World Intellectual Property Organization (WIPO). It consists of all member countries bound at least by the administrative provisions of the Stockholm Act. 5. The International Bureau of WIPO is the administrative organ of the Union.

Becoming Party to the Convention 5. 5. Special agreements in the form of multilateral treaties may be agreements prepared and administered by the International Bureau of WIPO. it should be noted that the International Bureau of WIPO may not take a position in controversies concerning the interpretation or application of the Paris Convention among member countries. before the International Court of Justice.158 Such special agreements may take the form of bilateral agreements or multilateral treaties.162 The matter of disputes is dealt with in Article 28 of the Convention.161 Provisions concerning denunciation are contained in Article 26 of the Convention.160 Accession to the Convention automatically entails acceptance of all the clauses in the Convention. In doing so. The Convention enters into force. that the right of denunciation may not be exercised by any country before the expiration of five years from the date on which it became a member of the Union. Accession therefore needs only unilateral action by the interested country and does not require any decision by the competent bodies of the Union. with respect to a country so adhering. by international arbitration.159 Accession to the Paris Convention is effected by the deposit of an instrument of accession with the Director General of WIPO. however. for example.157 According to that provision. the International Bureau of WIPO may also consult with other intergovernmental and with international non-governmental organizations. however. Any dispute between two or more countries of the Union concerning the interpretation or application of the Convention. the countries concerned may agree on any other method for settling their dispute. as well as admission to all the advantages thereof. the denunciation takes effect one year after the day on which the Director General receives the notification to that effect. dealing with special agreements. or agreements prepared and administered by other intergovernmental organizations. three months after the accession has been notified by the Director General of WIPO to all Governments of the member countries.156 An important provision among the administrative clauses of the Paris Convention is Article 19. However. 5. concerning the solving of disputes before the International Court of Justice. It is provided. 5. as provided in Article 21. the member countries have the right to make separately among themselves special agreements for the protection of industrial property. Special Agreements 5.163 Any country acceding to the Convention may declare upon accession that it does not consider itself bound by the preceding provisions. Any member country may denounce the Convention by addressing a notification to the Director General of WIPO. may be brought.Chapter 5 . In that case. 5. 5. which has not been settled by negotiation. These agreements must. In any case. Disputes 5. as is indicated in Article 22. . comply with the condition that they do not contravene the provisions of the Paris Convention.International Treaties and Conventions on Intellectual Property 261 cooperation with the Executive Committee. by any of the countries concerned.

168 The purpose of the Stockholm revision was to provide for rapid technological developments as well as the needs of newly independent developing countries. Thirdly. The Berne Convention for the Protection of Literary and Artistic Works History 5. Firstly. as indicated in its preamble. in other words protection is granted automatically and is not subject to the formality of registration. 1886. Principal Provisions Basic Principles 5. of the Berne Convention for the Protection of Literary and Artistic Works. The first major revision took place in Berlin in 1908. deposit or the like. according to which such national treatment is not dependent on any formality. there is the principle of “national treatment”. 5. Secondly. in Brussels in 1948. where new compromises were worked out. Instruments of accession or ratification are deposited with the Director General of the World Intellectual Property Organization (WIPO). 5. . the rights of authors in their literary and artistic works.167 The Berne Convention has been revised several times in order to improve the international system of protection which the Convention provides. there is independence of protection. there is automatic protection.169 The aim of the Berne Convention. It is open to all States. 5. in Stockholm in 1967 and in Paris in 1971. Changes have been effected in order to cope with the challenges of accelerating development of technologies in the field of utilization of authors’ works. and to introduce administrative and structural changes. The Berne Convention is the oldest international treaty in the field of copyright. As for the preferential provisions for developing countries worked out in Stockholm. is “to protect.262 WIPO Intellectual Property Handbook: Policy. these were further taken up at the Paris Revision Conference in 1971.” Article 1 lays down that the countries to which the Convention applies constitute a Union for the protection of the rights of authors in their literary and artistic works. in as effective and uniform a manner as possible. 5. and this was followed by the revisions in Rome in 1928.165 Copyright protection on the international level began by about the middle of the nineteenth century on the basis of bilateral treaties. Law and Use 5.166 The need for a uniform system led to the formulation and adoption on September 9. in order to recognize new rights as also to allow for appropriate revisions of established ones.164 The States party to the Paris Convention for the Protection of Industrial Property are listed in the appropriate document to be found inserted in the back flap of this volume. according to which works originating in one of the member States are to be given the same protection in each of the member States as these grant to works of their own nationals.170 The Convention rests on three basic principles. A number of such treaties providing for mutual recognition of rights were concluded but they were neither comprehensive enough nor of a uniform pattern.

the right of reproduction in any manner or form. which include any original production in the literary.175 Certain minimum standards of protection have been prescribed relating to the rights of authors and the duration of protection. adaptations. The protection of some categories of works is optional. not being nationals or residents of a member country. that is those based on other pre-existing works. For some categories of works. alternatively. however. receive the same protection as original works (Article 2(3)).174 Authors of works are protected. they are nationals or residents of a member country.171 Article 2 contains a non-limitative (illustrative and not exhaustive) list of such works. the Berne Convention offers to countries whose folklore is a part of their heritage.” Without mentioning the word. whatever may be the mode or form of its expression. through the national legislation. the right to perform dramatic. they first publish their works in a member country or simultaneously in a non-member and a member country. such as translations. addresses and other oral works (Article 2bis(2)) and works of folklore (Article 15(4)). scientific and artistic domain. ownership of copyright is a matter for legislation in the country where protection is claimed.176 The exclusive rights granted to authors under the Convention include the right of translation (Article 8). thus every State party to the Berne Convention may decide to what extent it wishes to protect official texts of a legislative. 5. Owners of Rights 5. the Convention provides that any member country may give protection to unpublished works where the identity of the author is unknown. Persons Protected 5. lectures. By providing for the bringing of actions by authorities designated by the State.173 Article 2(6) lays down that protection under the Convention is to operate for the benefit of the author and his successors in title. the right to broadcast and communicate to the public. such as cinematographic works (Article 14bis). Article 2(2) provides for the possibility of making the protection of works or any specified categories thereof subject to their being fixed in some material form.International Treaties and Conventions on Intellectual Property 263 according to which enjoyment and exercise of the rights granted is independent of the existence of protection in the country of origin of the work. For instance. Furthermore. a possibility of protecting it. rebroadcasting or . Rights Protected 5. in respect of both their unpublished or published works if. (Article 9). Derivative works. the competent authority which should represent the author of unknown identity and protect and enforce his rights in the countries party to the Convention. which includes any sound or visual recording. by designating.Chapter 5 . works of applied art (Article 2(7)). by wire. protection of choreographic works may be dependent on their being fixed in some form. Minimum Standards of Protection 5.172 One of the important provisions is the one that covers works or expressions of what is called “folklore. but where there is every ground to presume that the author is a national of that country. dramatico-musical and musical works (Article 11). according to Article 3. arrangements of music and other alterations of a literary or artistic work. Works Protected 5. administrative and legal nature (Article 2(4)). if.

Law and Use loudspeaker or any other analogous instrument. For cinematographic works. when acceding to the Convention. Article 7 lays down a minimum term of protection. Limitations 5. for the right to broadcast and communicate to the public. 10bis (reproduction of newspaper or similar articles and use of works for the purpose of reporting current events) and 11bis(3) (ephemeral recordings). exceptions to this basic rule for certain categories of works. then 50 years after the making of such a work.183 A majority of countries in the world have legislated for life plus a 50-year term of protection since it is felt fair and right that the lifetime of the author and the lifetime of his children should be covered.177 Independently of the author’s economic rights. or. however. in that a developing country may. the right of the author to claim authorship of his work and to object to any distortion. 5. The so-called “droit de suite” provided for in Article 14ter (concerning original works of art and original manuscripts) is optional and applicable only if legislation in the country to which the author belongs permits. rebroadcasting or loudspeaker or any other analogous instrument.182 There are. 5. if not made available. For photographic works and works of applied art. which is the life of the author plus 50 years after his death. Duration of Protection 5. 5. It provides for the possibility of using protected works in particular cases without having to obtain the authorization of the owner of the copyright and without having to pay any remuneration for such use. this right. a translation in the language for which protection is claimed. are included in Articles 9(2) (reproduction in certain special cases). or other derogatory action in relation to. the term is 50 years after the work has been made available to the public. this could also provide the incentive necessary to stimulate creativity. the right to make adaptations. make a reservation under the so-called “ten-year rule” (Article 30(2)(b)). in one of the member countries. arrangements or other alterations of a work (Article 12) and the right to make cinematographic adaptations and reproductions of a work (Article 14).264 WIPO Intellectual Property Handbook: Policy. the minimum term of protection is 25 years from the making of the work (Article 7(4)). according to the said rule. which are commonly referred to as free use of protected works. . and 13(1) for the right of recording musical works.181 The minimum standards of protection provided for in the Berne Convention also relate to the duration of protection. 5. the right of public recitation (Article 11ter). This provides for the possibility of reducing the term of protection in respect of the exclusive right of translation. Article 6bis provides for “moral rights” — that is. ceases to exist if the author has not availed himself of it within 10 years from the date of first publication of the original work.180 As far as the exclusive right of translation is concerned. 5. mutilation or other modification of. the Berne Convention offers a choice. the work which would be prejudicial to his honor or reputation. by wire. and constitute a fair balance between the interests of the authors and the needs of society. the broadcast of the work. 10 (quotations and use of works by way of illustration for teaching purposes). Such exceptions.179 There are two cases where the Berne Convention provides the possibility of compulsory licenses — in Articles 11bis(2). the broadcast of the work (Article 11bis).178 As a sort of counterbalance to the minimum standards of protection there are also other provisions in the Berne Convention limiting the strict application of the rules regarding exclusive right. by publishing or causing to be published.

at the moment of its coming into force for a specific country. 5.190 However. 5. There was certainly a challenge then posed to international copyright itself and this was. 5. the advance of technology made more attractive the extension of the geographical scope of the international conventions and multilateral agreements to an increasingly larger number of countries. in so far as moral rights are concerned. The Latest (Paris) Act of the Convention 5. . from the developed countries. where a “protocol regarding developing countries” known as the Stockholm Protocol was added to the Convention.189 The question of incorporating into the Convention special provisions for the developing countries was initially mooted at an African Copyright Meeting in Brazzaville in 1963. particularly in relation to developing countries. Particularly in the wake of the Second World War.International Treaties and Conventions on Intellectual Property 265 5. to withdraw from the Convention.186 The Berne Convention was developed initially according to the standards and requirements of the industrialized countries in Europe. The question was asked whether it was fair and workable to ask the developing countries to take on obligations under the Convention that were agreed upon by developed countries. since it applies to all works which. without taking into consideration the special circumstances of the former. 5.191 The Revision Conference convened in Paris in 1971 was predominantly concerned with finding solutions in order to support the universal effect of the Convention and to establish an appropriate basis for its operation. Meanwhile.187 While it was almost universally recognized that authors and other creators should be afforded the necessary protection for their intellectual creations. where they were already members by virtue of a past colonial or similar status. when the political map of the world changed considerably. particularly for their technological and educational needs. They were free to join or not to join it or. Various newly independent countries had to consider the question of possible accession to the international system of copyright protection as contained in the Convention. extends at least until the expiry of the economic rights.184 The term of protection.Chapter 5 . it soon became clear that the solution (the Stockholm Protocol) proposed was unlikely to gain much acceptance among Union countries. 5. which now forms an integral part of the Convention. sorted out through the give-and-take that culminated in the special provisions concerning developing countries that were incorporated in an Appendix. the Berne Convention also had to face new problems of development. have not yet fallen into the public domain in the country of their origin through the expiry of the term of protection. there was also a consciousness that the newly independent developing countries had genuine problems in gaining greater and easier access to works protected by copyright. This matter was pursued at the Conference called in Stockholm in 1967 for revision of the Berne Convention. in a manner. particularly those whose works were likely to be made use of under the provisions of the Protocol.188 Deliberations at the more recent revision conferences were therefore directed to adapting the systems of international protection of literary and artistic works to the needs of these newly independent countries. Application in time 5.185 The Protection under the Berne Convention is retrospective.

make preparations for the conferences to revise the Convention. under certain conditions. Becoming Party to the Convention 5. This exceptional regime concerns two rights. the Executive Committee. 5.266 WIPO Intellectual Property Handbook: Policy. Details of such provisions in favor of developing countries appear below. 10(2). 5. when required. 10bis) and the ten-year rule (Article 30(2)(b)). Law and Use 5. WIPO conducts studies and provides services designed to facilitate protection of copyright.197 In order to become a party to the Berne Convention. 5.196 The administrative provisions provide for an Assembly in which the Government of each member State shall be represented by one delegate. at the time of its ratification of or accession to the Paris Act. the Standing Committee on Copyright and Related Rights or Working Groups. a developing country has to specifically declare. The Executive Committee meets once every year in ordinary session. One fourth of the number of member countries are to be elected to the Executive Committee.193 According to this Appendix. In accordance with the directions of the Assembly and in cooperation with the Executive Committee.201 to 5. Articles 1 to 21 and the Appendix contain the substantive provisions and Articles 22 to 38 the administrative and final clauses.194 The provisions of the Berne Convention fall into two categories. including those of reproduction and translation (Articles 2bis. The Assembly determines the program. adopts the budget and controls the finances of the Union. Accession to the Berne Convention and membership of the Berne Union becomes effective three months after the date on which the Director General of WIPO has notified the deposit of the above-mentioned instrument of accession (Article 29(2)(a)). Each member country communicates to WIPO all new copyright laws. it participates in all meetings of the Assembly. In accordance with Article I of the Appendix. countries which are regarded as developing countries in conformity with the established practice of the General Assembly of the United Nations may. an instrument of accession has to be deposited with the Director General of WIPO (Article 29(1)). depart from the minimum standards of protection provided for in the Convention. in paragraphs 5. The administrative tasks performed by WIPO include assembling and publishing information concerning the protection of copyright. it shall also. Chapter 1). those of substance covering the material law and the administrative and final clauses covering matters of administration and structure. However. It also elects members of the Executive Committee of the Assembly. certain administrative changes are now under consideration (see under Constitutional Reform. The Appendix augments the Convention’s existing exceptions to the author’s exclusive rights. that it will avail . 9(2). the right of translation and the right of reproduction.195 The Berne Convention is administered by the World Intellectual Property Organization (WIPO).205. In the latest text of the Convention as revised at Paris in 1971. Administration Administrative Provisions 5.192 The Appendix to the Paris (1971) Act of the Berne Convention provides for special faculties open to developing countries concerning translation and reproduction of works of foreign origin. as the Secretariat.

Copies of translations and reproductions made and publication under licenses are not.International Treaties and Conventions on Intellectual Property 267 itself of the provisions in the Appendix concerning the compulsory licenses for translation and/or reproduction. where the identity of the author is unknown. scholarship or research. whose folklore is a part of their heritage. By this provision the Berne Convention has rendered it possible for the developing countries to protect their folklore also abroad. by the competent authority of the developing country concerned. to the right to vote in elections of or to be elected to the Executive Committee of the Berne Union (Article 23(2)(a)).199 To become a member of the Berne Union is in the interest of every country that wants to establish healthy conditions for the development of its culture and economy. These licenses may be granted. of works protected under the Convention. 5. Since the license is non-exclusive. Article 8(1)(a)). It was made a matter for legislation in the country of origin of such works to designate the competent authority which should represent the unknown author and protect and enforce his rights in the countries of the Union. 5. 5. while continuing to address the preoccupations of developing countries. Developing Countries and the Berne Convention 5. It would therefore be entitled: to full membership (right to vote) in the Berne Union Assembly (Article 22(3)(a)).198 In becoming party to the Berne Convention. and to specify the name of the author on all copies of such translations or reproductions. and (ii) reproduction for use in connection with systematic instructional activities. to automatic membership in the WIPO Coordination Committee during the period of its membership in the Executive Committee of the Berne Union (Convention establishing WIPO. They must provide for just compensation in favor of the owner of the right. allowed to be exported. as the case may be. Provision has also to be made to ensure a correct translation or an accurate reproduction of the work. but where there is every ground to presume that he is a national of a country of the Union.201 In the Appendix which forms an integral part of the Paris Act. The latest (1971) Paris Act of the Berne Convention thus recognizes a special right in favor of developing countries. the State concerned becomes a member of the Berne Union. after the expiry of certain time limits and after compliance with certain procedural steps. By providing for the bringing of actions by authorities designated by the State.200 The predominant concern at the last revision of the Berne Convention remained the reinforcement of the Convention. and it is particularly in the interest of every developing country. The Appendix provides for the possibility of granting non-exclusive and non-transferable compulsory licenses in respect of (i) translation for the purpose of teaching. the Berne Convention offers to developing countries. a possibility of protecting it. however. the copyright owner is entitled to bring out and place on the market his own equivalent copies. In other words the payment to be made by the compulsory licensee must be consistent with standards of royalties normally in vogue in respect of licenses freely negotiated between persons in the two countries concerned. the rights in such a work are to be acknowledged in all countries of the Union. It provides that in the case of unpublished works. special provisions were included concerning developing countries.Chapter 5 . upon which the power of the licensee to continue making .

For works connected with the natural and physical sciences and with technology (and this includes mathematical works) the period is three years. Any developing country may choose between those possibilities but cannot combine them. Law and Use copies under the license would cease. a translation in the language for which protection is claimed. 5. this “ten-year” system provides that for 10 years from the publication of the work the author’s consent has to be sought before the right to translate is obtained. The Appendix to the Paris Act of the Berne Convention thus allows a choice between a compulsory license system and the possibility of limiting the right of translation to 10 years as provided for in this Convention. To this has to be added a period of six to nine months. in that event.206 The States party to the Berne Convention for the Protection of Literary and Artistic Works are listed in the appropriate document to be found inserted in the back flap of this volume. starting on the date of the first publication of the work has to elapse before a license can be applied for. These licenses. and this is important when we take into account the part played in today’s context by the radio and television for educational purposes. according to the said rule. 5. when ratifying or acceding to the Paris Act.204 The possibility that the Appendix provides for the grant of a compulsory license. may favorably influence negotiation and may lead to increased scope for voluntary licensing. a period of three years. which provides for the possibility of reducing the term of protection as far as the exclusive right of translation is concerned.268 WIPO Intellectual Property Handbook: Policy. There is a distinction between languages in general use also in one or more developed countries (English. In other words. for obtaining licenses according to the formalities provided for in the Convention.202 Compulsory licenses for translations can be granted for languages generally spoken in the developing country concerned. 5. make a reservation under the so-called “ten-year rule” (Article 30(ii) (b)). are not for authorizing the broadcasting of a translated work. in one of the countries of the Berne Union. 5. the compulsory licensee’s stock can be exhausted. . this right.203 In respect of reproduction. However. It is also important here to point out that the system of translation licenses includes licenses for broadcasting. by publishing or causing to be published. as the case may be. for example) and those not in general use there (largely local languages of developing countries). Generally it is five years from the first publication. while for works of fiction. after this period the right of translation is in the public domain. the period after which licenses can be obtained varies according to the nature of the work to be reproduced. the period is seven years. if authorization is desired. 5. French and Spanish. however. In the case of a language in general use in one or more developed countries.205 In so far as compulsory licenses for translation are concerned. whereas for other languages the period has been reduced to one year. poetry and drama. the Berne Convention offers a choice in that a developing country may. instead of availing itself of the facility offered by the system mentioned earlier. they relate only to translations made for broadcasting purposes. ceases to exist if the author has not availed himself of it within 10 years from the date of first publication of the original work.

the preparatory work of new copyright and related rights norms in the WIPO committees was intensified to deal with problems not addressed by the TRIPS Agreement. on interpretation of existing international norms. rather than trying to establish new international norms. At the end of the 1980s. approximately every 20 years. cinematography and television. a number of important new technological developments took place — reprography. in order to find responses to new technological developments. until revisions which took place in Stockholm in 1967 and in Paris in 1971.” Article 20 of the Berne Convention contains the following provision: “The Governments of the countries of the Union reserve the right to enter into special agreements among themselves. Those recommendations. computer storage of works and electronic databases.211 After the adoption of the TRIPS Agreement under the auspices of GATT.” Thus. cable television. contributing to the development of copyright all over the world. however. guiding principles and model provisions were based. was revised quite regularly.International Treaties and Conventions on Intellectual Property 269 The WIPO Copyright Treaty (WCT) Introduction 5. databases. the international copyright community followed the strategy of “guided development” by study and discussion. concerning computer programs.” satellite broadcasting and cable television). 5. after its adoption in 1886.” satellite broadcasting.Chapter 5 . sometimes in cooperation with Unesco) offered guidance to governments on how to respond to the challenges of new technologies.212 The first sentence of Article 1(1) of the WCT provides that “This Treaty is a special agreement within the meaning of Article 20 of the Berne Convention for the Protection of Literary and Artistic Works. in two parallel committees of experts. compact cassette systems facilitating “home taping. in general. 5. 5. in so far as such agreements grant to authors more extensive rights than those granted by the Convention. photography.208 In the 1970s and 1980s. first.209 For a while. etc.210 The preparation of new. The recommendations.207 The Berne Convention for the Protection of Literary and Artistic Works. the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT). it was recognized that guidance would not suffice any longer. To this end. such as sound recording technology. the . and at WIPO. in one committee of experts and later. video technology. radio. in 1996 the WIPO Diplomatic Conference on Certain Copyright and Related Rights Questions adopted two treaties. But they also included some new standards (for example. in the framework of the Uruguay Round negotiations. “home taping. Legal Nature of the WCT and its Relationship with Other International Treaties 5. particularly the Berne Convention (for example. in general. the increase of the importance of computer programs. The revision conferences were convened. guiding principles and model provisions worked out by the various WIPO bodies (in the beginning. as regards Contracting Parties that are countries of the Union established by that Convention. or contain other provisions not contrary to this Convention. 5. binding international norms began in two forums — within GATT. The guidance thus offered in the “guided development” period had an important impact on national legislation. concerning distribution and rental of copies).

all substantive provisions of the Berne Convention.216 It should also be pointed out that there is no specific relationship between the WCT and the WPPT either. The TRIPS safeguard clause also has importance from the viewpoint of at least one article of the Berne Convention which contains substantive provisions — namely Article 6bis on moral rights — since that article is not included by reference in the TRIPS Agreement. providing that “Contracting Parties shall comply with Articles 1 to 21 and the Appendix of the Berne Convention. not only countries party to any act of the Berne Convention. and also certain intergovernmental organizations. 5. These provisions should be considered in the light of the provisions of Article 17 of the Treaty.215 The second sentence of Article 1(1) of the WCT deals with the question of the relationship of the WCT with treaties other than the Berne Convention. irrespective of whether or not they are party to the Convention.” The TRIPS Agreement and the Universal Copyright Convention are examples of such “other treaties.” The scope of this safeguard clause differs from the parallel provision in the TRIPS Agreement. Law and Use above-quoted provision of Article 1(1) of the WCT makes clear that no interpretation of the WCT is acceptable which may result in any lowering of the level of protection granted by the Berne Convention. but also any member countries of WIPO.270 WIPO Intellectual Property Handbook: Policy.217 During the preparatory work. nor shall it prejudice any rights and obligations under any other treaties. in principle.” Article 1(3) of the Treaty clarifies that. Substantive Provisions of the WCT Provisions Relating to the So-called “Digital Agenda” 5. It states that “This Treaty shall not have any connection with treaties other than the Berne Convention. only those countries may adhere to that Convention which are party to the Berne Convention or the Universal Copyright Convention. It is another matter that such a separate adherence is not desirable. While.214 Article 1(2) of the Treaty contains a safeguard clause similar to the one included in Article 2. 5. since it includes. under which not only countries party to the said 1971 Paris Act. the Berne Convention means the 1971 Paris Act of that Convention. Under Article 24(2) of the Rome Convention. where necessary. may adhere to the Treaty. 5. discussed below.” 5. it is not a condition that they be party to the WCT (or the Berne Convention or the Universal Copyright Convention). by reference. in general. and the latter is also an “other” treaty covered by the second sentence of Article 1(1) of the WCT.213 Article 1(4) of the Treaty establishes a further guarantee for fullest possible respect of the Berne Convention. and. There is also no such relationship between the WCT and the WPPT equivalent to that between the Berne Convention and the Rome Convention. any member country of WIPO may accede to the WPPT.2 of the TRIPS Agreement: “Nothing in this Treaty shall derogate from existing obligations that Contracting Parties have to each other under the Berne Convention for the Protection of Literary and Artistic Works. create new norms to respond to the problems . in this context. Article 1(2) of the WCT only has relevance from the viewpoint of Articles 22 to 38 of the Berne Convention containing administrative provisions and final clauses which are not included by reference (either in the WCT or the TRIPS Agreement) and only to the extent that those provisions provide obligations for Contracting Parties. it became clear that the most important and most urgent task was to clarify existing norms and.

However. It became evident that it would be difficult to reach consensus on a solution based on one right over the other. which extends to reproduction “in any manner or form” irrespective of the duration of the reproduction. the limitations on and exceptions to rights in a digital environment. Storage of Works in Digital Form in an Electronic Medium 5. is much broader. while explicit recognition of the latter covers only one category. in this section. although the rights of communication to the public and distribution were identified as the two major possibilities.Chapter 5 .223 There was. which offers an appropriate basis to introduce any justified exceptions such as the above-mentioned cases of transient and incidental reproductions in national legislation. the former does not extend to certain categories of works. and that the various experts considered one aspect more relevant than another. It is another matter that the word “storage” may still be interpreted in somewhat differing ways. 5. The issues addressed in this context were referred to as the “digital agenda. the most fundamental reason was that coverage of the above-mentioned two rights differs to a great extent in national laws. and the exceptions permitted thereunder.222 During the preparatory work.” 5. The Diplomatic Conference adopted an agreed statement which reads as follows: “The reproduction right. that the Berne Convention does not offer full coverage for those rights. It is understood that the storage of a protected work in digital form in an electronic medium constitutes a reproduction within the meaning of Article 9 of the Berne Convention. and just because a reproduction is of a temporary nature. namely that of cinematographic works. As discussed below. with appropriate exceptions. It was also noted. and particularly by the Internet.224 Differences in the legal characterization of digital transmissions were partly due to the fact that such transmissions are of a complex nature. however. 5. must not be restricted merely because a reproduction is in digital form through storage in an electronic memory.219 In June 1982. below. fully apply in the digital environment. no agreement concerning the right or rights which should actually be applied. in harmony with the “three-step test” provided for in that provision of the Convention (see below. the right of distribution may also be relevant in respect of transmissions in digital networks. Also due to its relationship with the right of rental. together with the former right. . in particular to the use of works in digital form. Transmission on Digital Networks 5. It also follows from the same first sentence that Article 9(2) of the Convention is also fully applicable. its scope. the right of distribution is discussed. under “Limitations and Exceptions”).221 The second sentence of the agreed statement confirms the definition of storage of works.International Treaties and Conventions on Intellectual Property 271 raised by digital technology. as set out in Article 9 of the Berne Convention. however. technological measures of protection and rights management information. an agreement emerged that the transmission of works on the Internet and in similar networks should be the object of an exclusive right of authorization of the author or other copyright owner. a WIPO/Unesco Committee of Governmental Experts clarified that storage of works in an electronic medium is reproduction. This means that the concept of reproduction under Article 9(1) of the Convention.218 The provisions of the WCT relating to the “agenda” cover the following issues — the rights applicable to the storage and transmission of works in digital systems.220 It follows from this first sentence that Article 9(1) of the Convention is fully applicable.” 5. however. 5.

” 5. these provisions should be understood to permit Contracting Parties to devise new exceptions and limitations that are appropriate in the digital network environment. finally.” This statement is intended to clarify the issue of liability of service and access providers in digital networks like the Internet: it is evident that. or devising new exceptions and limitations for such environment. Limitations and Exceptions in the Digital Environment 5. particularly uses on the Internet. at the same time.229 No rights in respect of digital uses of works.228 An agreed statement was adopted in this respect. in respect of the actual choice of the right or rights to be applied — sufficient freedom should be left to national legislation. It is also understood that Article 10(2) [of the Treaty] neither reduces nor extends the scope of applicability of the limitations and exceptions permitted by the Berne Convention. should convey the interactive nature of digital transmissions. 11ter(1)(ii). Similarly. 14(1)(ii) and 14bis(1) of the Berne Convention. Technological Measures of Protection and Rights Management Information 5. Thus Article 8 of the Treaty reads as follows: “Without prejudice to the provisions of Articles 11(1)(ii).272 WIPO Intellectual Property Handbook: Policy. may be applied efficiently without the support of technological measures of protection and rights . is subject to the three-step test included in that Article (see below. 5. and clarifies that that right also covers transmissions in interactive systems described in a manner free of legal characterization. first of all. free from specific legal characterization.227 An agreed statement was adopted concerning this Article 8. 11bis(1)(i) and (ii). in respect of legal characterization of the exclusive right — that is. that the gaps in the Berne Convention in the coverage of the relevant rights — the right of communication to the public and the right of distribution — should be covered. if a person engages in an act not covered by a right provided in the Convention (and in corresponding national laws). under “Limitations and Exceptions”). the right of distribution was meant. which provided that the act of digital transmission should be described in a neutral way.” The provisions of Article 10 of the Treaty referred to in the agreed statement are discussed below. such person has no direct liability for the act covered by such a right. By the “other” right. and. by wire or wireless means. including the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them. that.226 The WCT applies this “umbrella solution” by extending applicability of the right of communication to the public to all categories of works. It is further understood that nothing in Article 8 precludes a Contracting Party from applying Article 11bis(2). This solution was referred to as the “umbrella solution. but “other” right might also be a specific new right such as that of making available to the public as provided for in Articles 10 and 14 of the WPPT.225 A specific solution was therefore adopted. in this section. that such a description should not be excessively technical and. which reads as follows: “It is understood that the provisions of Article 10 [of the Treaty] permit Contracting Parties to carry forward and appropriately extend into the digital environment limitations and exceptions in their national laws which have been considered acceptable under the Berne Convention. It reads as follows: “It is understood that the mere provision of physical facilities for enabling or making a communication does not in itself amount to communication within the meaning of this Treaty or the Berne Convention. authors of literary and artistic works shall enjoy the exclusive right of authorizing any communication to the public of their works. It is obvious that extending limitations and exceptions into the digital environment.” It was stated in the Diplomatic Conference that Contracting Parties are free to implement the obligation to grant an exclusive right to authorize such “making available to the public” also through the application of a right other than the right of communication to the public or through the combination of different rights. Law and Use 5.

but appropriate legal provisions are included in Articles 11 and 12 of the Treaty. national treatment. or information about the terms and conditions of use of the work. formality free protection. without authority. it is understood that a reference in Articles 3 to 6 of the Berne Convention to a ‘national of one of the countries of the Union’ will. enable. Contracting Parties must provide “adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts. in respect of their works. mean.” 5. The application of such measures and information are left to the interested right-owners. broadcast or communicate to the public.” 5. that it will induce. works or copies of works knowing that electronic rights management information has been removed or altered without authority. the expression ‘country of the Union’ will be read as if it were a reference to a Contracting Party to this Treaty in the application of those Berne Articles in respect of protection provided for in this Treaty.230 Under Article 11 of the Treaty.231 Article 12(1) of the Treaty obliges Contracting Parties to “provide adequate and effective legal remedies against any person knowingly performing any of the following acts knowing.232 An agreed statement was adopted by the Diplomatic Conference concerning Article 12 of the Treaty. (i) to remove or alter any electronic rights management information without authority. or with respect to civil remedies having reasonable grounds to know.” The second part reads: “It is further understood that Contracting Parties will not rely on this Article to devise or implement rights management systems that would have the effect of imposing formalities which are not permitted under the Berne Convention or this Treaty. in regard to an intergovernmental organization . it provides for the mutatis mutandis application of Articles 3 to 6 of the Berne Convention. when any of these items of information is attached to a copy of a work or appears in connection with the communication of a work to the public.234 An agreed statement was also adopted by the Diplomatic Conference as guidance in the mutatis mutandis application of those provisions.International Treaties and Conventions on Intellectual Property 273 management information necessary to license and monitor uses. the owner of any right in the work. 2bis(2). 4 and 5 of the Berne Convention will be read as if it were a reference to the Berne Convention and this Treaty. 5. in applying Article 3 of this Treaty. 3. and any numbers or codes that represent such information. Finally. when these Articles are applied to this Treaty.” Other Substantive Provisions Criteria of Eligibility for Protection 5. It is also understood that the expression ‘country outside the Union’ in those Articles in the Berne Convention will. (ii) to distribute.” Article 12(2) defines “rights management information” as meaning “information which identifies the work. which are not authorized by the authors concerned or permitted by law. the author of the work. in the same circumstances. 5.Chapter 5 . which reads as follows: “It is understood that. import for distribution. The first part reads: “It is understood that the reference to ‘infringement of any right covered by this Treaty or the Berne Convention’ includes both exclusive rights and rights of remuneration. facilitate or conceal an infringement of any right covered by this Treaty or the Berne Convention.233 The WCT settles certain issues — country of origin. and that ‘this Convention’ in Articles 2(8). possible restriction of (“backdoor”) protection in respect of works of nationals of certain countries not party to the Treaty — in a simple way: in Article 3. prohibiting the free movement of goods or impeding the enjoyment of rights under this Treaty. which is in two parts. be read as if it were a reference to a country that is not a Contracting Party to this Treaty.

5. procedures. Article 2 of the Treaty clarifies that “Copyright protection extends to expressions and not to ideas.236 First.4 of the TRIPS Agreement. as determined in the national laws of Contracting Parties — as those covered by Articles 11 and 14. 5.240 Article 7 of the Treaty provides an exclusive right of authorizing commercial rental to the public in respect of the same categories of works — computer programs. particularly in relation to computer programs and databases.237 Second. 5. Nor is the principle reflected in Article 2 new in the context of the Berne Convention. The exceptions are in respect of computer programs which are not themselves the essential objects of the rental. since countries party to the Convention have always understood the scope of protection under the Convention in that way.274 WIPO Intellectual Property Handbook: Policy. The Treaty shares the same concept of literary and artistic works as is found in the Berne Convention. with the authorization of the author. some clarifications on the matter in common with those in the TRIPS Agreement.239 Article 6(2) of the Treaty deals with the issue of the exhaustion of the right of distribution. in respect of cinematographic works unless commercial rental leads to widespread copying of such works. which includes by reference the relevant provisions of the Convention). cinematographic works and works embodied in phonograms. in some legal systems.2 of the TRIPS Agreement. and at the most as adding to both. Two agreed statements specify that the scope of protection for computer programs under Article 4 of the Treaty and for compilations of data (databases) under Article 5 of the Treaty “is consistent with Article 2 of the Berne Convention and on par with the relevant provisions of the TRIPS Agreement. an exclusive right of distribution. was explored in the WCT. also prescribes the mutatis mutandis application of Articles 2 and 2bis of the Berne Convention. Under the Berne Convention. methods of operation or mathematical concepts as such. and in respect of a Contracting Party which. and. it is only in respect of cinematographic works that such a right is granted explicitly. The Treaty also includes. on April 15. materially impairing the exclusive right of reproduction. The scope of the subject matter covered by copyright. surviving at least until the first sale of copies. which are similar to those included in Article 10 of the TRIPS Agreement. Law and Use that is a Contracting Party to this Treaty. Articles 4 and 5 of the Treaty contain clarifications concerning the protection of computer programs as literary works and of compilations of data (databases). that is.238 Article 6(1) of the WCT provides an exclusive right to authorize the making available to the public of originals and copies of works through sale or other transfer of ownership. and with the same exceptions. It does not oblige Contracting States to choose national/regional exhaustion or international exhaustion — or to regulate at all the issue of exhaustion — of the right of distribution after the first sale or other first transfer of ownership of the original or a copy of the work.” Subject Matter and Scope of Protection 5.” This is virtually the same as the clarification included in Article 9. had and still has in force a system of equitable remuneration for rental of copies of works included in phonograms. 1994. Such a right. 5. dealt with above. instead of an exclusive right: in . may be deduced as an indispensable corollary to the right of reproduction. Article 6(1) of the WCT should be considered at least a useful clarification of the obligations under the Berne Convention (and also under the TRIPS Agreement. however. the right of distribution is in fact recognized on this basis. a national of one of the countries that is member of that organization.235 Article 3 of the Treaty.” Rights to be Protected 5.

the measures necessary to ensure the application of this Treaty.” Duration of Protection of Photographic Works 5.1 of the TRIPS Agreement. paragraph (1) is a mutatis mutandis version of Article 36(1) of the Berne Convention. the expressions ‘copies’ and ‘original and copies. or exceptions to.241 An agreed statement was adopted by the Diplomatic Conference on Articles 6 and 7 of the Treaty. either directly or through inclusion by reference to the substantive provisions of the Berne Convention. the rights under the Berne Convention.244 Both paragraphs use the three-step test included in Article 9(2) of the Berne Convention to determine the limitations and exceptions allowed.International Treaties and Conventions on Intellectual Property 275 the latter case the Contracting Party may maintain that system provided that commercial rental does not give rise to the material impairment of the exclusive right of authorization. which applies the same test for all rights provided for in the TRIPS Agreement.’ being subject to the right of distribution and the right of rental under the said Articles. this test is applicable only to the right of reproduction. exceptions and limitations are only allowed in certain special cases: provided that they do not conflict with a normal exploitation of the work. Limitations and Exceptions 5. In this. the rights granted under the Treaty which may be applied.Chapter 5 . 5.243 Paragraph (1) of Article 10 determines the types of limitations on. as also for works of applied art.” 5. the provisions of Article 10 are similar to Article 13 of the TRIPS Agreement.247 Article 14.245 Under Article 9(2) of the Berne Convention. provided that they do not unreasonably prejudice the legitimate interests of the authors. prescribes a shorter term — 25 years — for photographic works than for the general 50-year term. That is to say. and stipulates that the provisions of that Article must also be applied to the Treaty. while both paragraphs of Article 10 of the Treaty cover all rights provided for in the Treaty and the Berne Convention respectively. in accordance with their legal systems. It reads: “As used in these Articles.242 Article 9 of the WCT removes the unjustified discrimination against photographic works as to the duration of protection. which. or exceptions to. Application in Time 5.248 Paragraph (2) of Article 14 is a mutatis mutandis version of the first sentence of Article 41. while paragraph (2) of that Article provides criteria for the application of limitations of.246 Article 13 of the WCT refers simply to Article 18 of the Berne Convention to determine the works to which the Treaty applies at the moment of its entry into force for a given Contracting State. It provides that “Contracting Parties undertake to adopt. 5. It reads: “Contracting Parties shall ensure that enforcement procedures are available under their law so as to permit effective action against any act of infringement of . refer exclusively to fixed copies that can be put into circulation as tangible objects. Enforcement of Rights 5. 5. It obliges Contracting Parties not to apply Article 7(4) of the Berne Convention.

5. the priority of an earlier application can be claimed for applications filed subsequently in foreign countries but such later applications must be filed within 12 months of the filing date of the earlier application.252 The national patent system requires the filing of individual patent applications for each country for which patent protection is sought. matters covered by this Treaty and that it has been duly authorized. Under paragraph (1). in general.” Administrative Provisions 5. all at a time when the applicant often does not know whether he is likely to obtain a patent or whether his invention is really new compared with the state of the art. in accordance with its internal procedures. any Member State of WIPO may become party to the Treaty. 5.276 WIPO Intellectual Property Handbook: Policy. Under the traditional Paris Convention route. This involves for the applicant the preparation and filing of patent applications for all countries in which he is seeking protection for his invention within one year of the filing of the first application. having made the declaration referred to in the preceding paragraph in the Diplomatic Conference that has adopted this Treaty.251 The number of instruments of ratification or accession needed for the entry into force of the WCT was fixed at 30. The WCT entered into force on March 6. may become party to this Treaty. Law and Use rights covered by this Treaty.253 Filing of patent applications under the national system means that every single Patent Office with which an application is filed has to carry out a formal examination of every application filed . The Patent Cooperation Treaty (PCT) Introduction The National Patent System 5. Two specific features should be mentioned. namely the possibility of intergovernmental organizations becoming party to the Treaty and the greater number of instruments of ratification or accession needed for entry into force of the Treaty. to become party to this Treaty. Paragraph (2) provides that “The Assembly may decide to admit any intergovernmental organization to become party to this Treaty which declares that it is competent in respect of. the Eurasian patent system and the European patent system. are the same as or similar to the provisions of other WIPO treaties on the same issues. and has its own legislation binding on all its Member States on.249 The administrative provisions and final clauses. This means expenses for translation.250 Article 17 of the Treaty provides for eligibility for becoming party to the Treaty. patent attorneys in the various countries and payment of fees to the Patent Offices. including expeditious remedies to prevent infringements and remedies which constitute a deterrent to further infringements. The States party to the WCT are listed in the appropriate document to be found inserted in the back flap of this volume. 2002. with the exception of the regional patent systems such as the African Intellectual Property Organization (OAPI) system.” 5.” Paragraph (3) adds the following: “The European Community. the Harare Protocol system established in the framework of the African Regional Industrial Property Organization (ARIPO).

5. a number of BIRPI meetings prepared drafts and a Diplomatic Conference held in Washington. complements the Paris Convention. It is often spoken of as being the most significant advance in international cooperation in this field since the adoption of the Paris Convention itself. the Patent Cooperation Treaty is an agreement for international cooperation in the field of patents. Indeed. in fact. It is however largely a treaty for rationalization and cooperation with regard to the filing. 1978. The PCT does not compete with but. 1978. with an initial 18 Contracting States. it is a special agreement under the Paris Convention open only to States which are already party to that Convention. 5. - . in June 1970 adopted a treaty called the Patent Cooperation Treaty.257 As its name suggests.254 The principal difference between the national patent system and the regional patent systems such as those mentioned above is that a regional patent is granted by one Patent Office for several States. Statistical indications of this success can be found in the relevant document in the back flap of this volume. In the following years. Where Patent Offices examine patent applications as to substance. by simplification leading to more effectiveness and economy. evidenced by the number of applications filed. or acting for. searching and examination of patent applications and the dissemination of the technical information contained therein. of a single application (the “international application”) in one language having effect in each of the countries party to the PCT which the applicant names (“designates”) in his application. provides for the formal examination of the international application by a single Patent Office.Chapter 5 . History of the PCT 5. 5. 5. Otherwise. and the explanations given in the preceding two paragraphs are equally valid. The Patent Cooperation Treaty or “PCT” entered into force on January 24. the Executive Committee of the International (Paris) Union for the Protection of Industrial Property invited BIRPI (the predecessor of WIPO) to undertake urgently a study of solutions to reduce the duplication of the effort both for applicants and national Patent Offices.256 The progress of the PCT demonstrates the certainty that many more countries. D. The PCT does not provide for the grant of “international patents”: the task of and responsibility for granting patents remains exclusively in the hands of the Patent Offices of. Objectives of the PCT 5. the countries where protection is sought (the “designated Offices”).259 To achieve its objective. the procedure is the same.International Treaties and Conventions on Intellectual Property 277 with it..255 In order to overcome some of the problems involved in the national system. and became operational on June 1. each Office has to make a search to determine the state of the art in the technical field of the invention and has to carry out an examination as to patentability. in September 1966. will continue to increase significantly. the receiving Office.C. will become party to the PCT in the years ahead and that its use. with a single Patent Office (the “receiving Office”). to improve on — in the interests of the users of the patent system and the Offices which have responsibility for administering it — the previously established means of applying in several countries for patent protection for inventions. the PCT: establishes an international system which enables the filing. developing as well as developed.258 The principal objective of the PCT is.

5. which is the task of the designated Offices. whereas one speaks of the “national phase” to describe the last part of the patent granting procedure. a report containing an opinion as to whether the claimed invention meets certain international criteria for patentability. In PCT terminology. and with questions of how best to allocate resources so as to ensure that the patent system yields the greatest return from the available manpower. provides an option for an international preliminary examination of the international application. as well as their communication to the designated Offices.278 WIPO Intellectual Property Handbook: Policy.260 The procedure described in the preceding paragraph is commonly called the “international phase” of the PCT procedure.261 Especially in more developed countries with a greater number of patent applications. of a national application in those PCT Contracting States which the applicant designates for a national patent in his application. as of the international filing date. i. the countries which have been designated in the international application.263 Any national or resident of a PCT Contracting State can file an international application. an ARIPO patent. a Eurasian patent. by the time the international application reaches the national Office. a European patent or an OAPI patent). In addition. .e. The Functioning of the PCT System Filing an International Application 5.262 Further main objectives of the PCT are to facilitate and accelerate access by industry and other interested sectors to technical information related to inventions and to assist developing countries in gaining access to technology. Law and Use - subjects each international application to an international search which results in a report citing the relevant prior art (mainly published patent documents relating to previous inventions) which may have to be taken into account in deciding whether the invention is patentable.264 An international application has the effect. Under the PCT system. providing they are designated for a regional patent (that is. provides for centralized international publication of international applications with the related international search reports. It has the effect of a regional patent application in those PCT Contracting States which are party to a regional patent treaty. which will act as a PCT receiving Office. the national Offices of. which gives the applicant and subsequently the Offices that have to decide whether or not to grant a patent. the International Bureau can act as a receiving Office as an option for nationals and residents of all PCT Contracting States. International applications can be filed in most cases with the national Office. it has already been examined as to form by the receiving Office.. “national” phase or “national” fees includes the reference to the procedure before a regional patent Office. been searched by the International Searching Authority and possibly examined by an International Preliminary Examining Authority. Patent Offices have been struggling for years with heavy workloads (leading to delays). These centralized procedures of the international phase thus reduce the workload of the national Patent Offices. - - 5. or acting for. 5. a reference to “national” Office. 5.

The receiving Office also collects all the PCT fees and transfers the search fee to the International Searching Authority and the international fee to the International Bureau. 5. a high quality search of the patent documents and other technical literature in those languages in which most patent applications are filed (English. so far as the form and contents of the application are concerned.271 Every international application is subjected to an international search.270 The receiving Office. which are experienced Patent Offices that have been specially appointed to carry out international searches by the Assembly of the PCT Union (the highest . to all the PCT Contracting States. is entitled to a sizable reduction of certain PCT fees. and no subsequent modifications because of varying national or regional requirements (and the cost associated therewith) will become necessary. 5. after having accorded an international filing date and made a formal check. 5. An international application which is prepared in accordance with these standards will be acceptable.269 The language in which an international application can be filed depends upon the requirements of the receiving Office with which the application is filed and of the International Searching Authority which is to carry out the international search. If there are several applicants.266 Only a single set of fees is incurred for the preparation and filing of the international application. the receiving Office. sends a copy of the international application to the International Bureau of WIPO (the “record copy”) and another copy (the “search copy”) to the International Searching Authority. including the international fee.Chapter 5 . and in certain cases Chinese. other languages also accepted. to cover the work of the International Searching Authority. Japanese. 5. Russian and Spanish.267 The fees payable to the receiving Office for an international application consist of three main elements: the transmittal fee. and they are payable in one currency and at one Office.International Treaties and Conventions on Intellectual Property 279 5. It keeps a third copy (the “home copy”). Japanese. so far. English. No national law may require compliance with requirements relating to the form or contents of the international application different from or additional to those which are provided for by the PCT. Finnish. based on income figures used by the United Nations for determining its scale of assessments for contributions to it. to cover the work of the International Bureau.265 The PCT prescribes certain standards for international applications. Norwegian and Swedish. are Danish.268 An applicant who is a natural person and who is a national of and resides in a State whose per capita national income is below a certain level. to cover the work of the receiving Office. each must satisfy the above-mentioned criteria. Payment of national fees to the designated Offices is delayed. Russian and Spanish). The high quality of the international search is assured by the standards prescribed in the PCT for the documentation. German. that is. French. 5. French and German. the international fee. The main languages in which international applications may be filed are Chinese. The national fees become payable much later than for a filing by the traditional Paris Convention route. staff qualifications and search methods of the International Searching Authorities. Dutch. the search fee. International Search 5.

in particular Offices which do not have technically qualified staff and an extensive collection of patent documents arranged in a manner suitable for search purposes. and to decide whether it is worth continuing to seek protection for his invention in the designated States. the claims. The citations of documents of relevant prior art in the international search report enable the applicant to calculate his chances of obtaining a patent in or for the countries designated in the international application. 5. International publication occurs. assists the applicant in the subsequent prosecution of the application before the designated Offices. the Russian Patent Office. in general. the minimum documentation and any additional documentation it may possess. 18 months after the priority date of the international application. as from 1920. the abstract and also the description. of the major industrialized countries. If a search report is unfavorable.. in examining applications and otherwise evaluating the inventions described. the Chinese Patent Office..273 Each International Searching Authority is required to have at least the prescribed PCT minimum documentation. in making the search. the technological advance made by the inventor) and to set out the scope of the protection which may ultimately be obtained.278 International publication serves two main purposes: to disclose to the public the invention (i. which is normally made available to the applicant by the fourth or fifth month after the application is filed. The International Bureau includes the search report in the international publication of the international application and sends a copy to the designated Offices. The obligation to consult at least the PCT minimum documentation guarantees a high level of international searching. properly arranged for search purposes. any drawings and the international search report.272 The following Offices have been appointed to act as International Searching Authorities: the Australian Patent Office. 5. in which the citations of prior art would appear not to prevent the grant of a patent. must make use of its full facilities. . the Austrian Patent Office. in general.274 The results of the international search are given in an international search report. the Spanish Patent and Trademark Office. 5. the European Patent Office. International Publication 5.276 The international search report assists designated Offices. i.280 WIPO Intellectual Property Handbook: Policy. which can be described in general as comprising the patent documents. 5. the applicant has the opportunity to amend the claims in his international application to better distinguish the invention from the state-of-the-art or to withdraw the application before it is published. 5. 5. together with agreed items of non-patent literature.e.e. together with data such as the International Patent Classification (IPC) symbol assigned by the International Searching Authority.279 The International Bureau publishes a PCT pamphlet which contains a front page setting out bibliographic data furnished by the applicant. 5. If the claims of the international application have been amended. the Swedish Patent Office and the United States Patent and Trademark Office. The International Searching Authority. the Japanese Patent Office. Law and Use administrative body created under the PCT) on the basis of an agreement to observe PCT standards and time limits.277 The International Searching Authority sends the international search report to the applicant and to the International Bureau. the claims are published both as filed and as amended. that is.275 An international search report which is favorable.

A CD-ROM workstation is also provided by the International Bureau. against payment of a fee. in any case.. It is noted that. allowing the selection of the published international applications by technical fields. whether it appears to involve an inventive step and whether it appears to be industrially applicable. they are supplied on request. with the exception of the Spanish Patent and Trademark Office. the latter remaining the exclusive task and responsibility of the designated Offices. or acting for. The results of the international preliminary examination are given in a report which is made available to the applicant and the “elected Offices” (which are the Offices of. as explained above. the abstract and the international search report are also published in English.285 Usually upon publication of the international application (but at the latest by the end of the 19th month after the priority date). The main advantages of the CD-ROM format are rapid access via computer and the limited storage space required. The copy communicated will be used for the subsequent prosecution of the international application before those Offices since. if required by any elected Office. The Offices which have been appointed are the same as those appointed as International Searching Authorities. English. however.Chapter 5 .281 The publication of each pamphlet is announced in the PCT Gazette. it is translated and published in English. the international preliminary examination report will provide a solid basis for parties interested in the invention (e. more than half of these Offices have waived the weekly communications of copies of published international applications and receive. instead. French. German. 5. which is also responsible for translating the report into English. In practice. on the basis of the international criteria mentioned above. he may make a specific request for international preliminary examination (by filing a “demand” in which designated States are “elected”) in order to obtain an opinion as to whether the claimed invention meets any or all of the following criteria — whether it appears to be novel. To the public. the international application is published in Chinese. Applicants from certain States are entitled to a sizable reduction of the handling fee (see paragraph 5.282 These publications. above). They are now also available in CD-ROM format in searchable form. if that language is Chinese. and the elected Offices have an even better basis for their decision whether to grant a patent. Japanese. The opinion on the patentability of the invention. Russian or Spanish. 5. the International Bureau communicates the international application to the designated Offices. Russian or Spanish. a . which lists the published international applications in the form of entries reproducing data taken from the front pages of the pamphlets. the pamphlet and the PCT Gazette. 5. provides the applicant with an even stronger basis for calculating his chance of obtaining a patent. If. Each issue of the PCT Gazette also contains a Classification Index. German.International Treaties and Conventions on Intellectual Property 281 5. the PCT is only a system for filing and not for granting patents.283 Once the applicant has received the international search report.280 The pamphlet is published in the language of the international application as filed. the title of the invention.g. for licensing purposes) to evaluate the validity of such patents. In countries where patents are granted without examination as to substance. International Preliminary Examination 5. Japanese. a free-of-charge complete collection on CD-ROM of all such applications. A fee for international preliminary examination is due when a demand is filed with the International Preliminary Examining Authority. 5. the International Preliminary Examining Authorities are appointed by the Assembly of the PCT Union.284 As in the case of the International Searching Authorities. If the international application has been filed in any other language. are distributed free of charge by the International Bureau on a systematic basis to all PCT Contracting States.268. together with a handling fee to cover the work of the International Bureau. the elected States) through the International Bureau. French.

int Advantages of the PCT System Advantages for Patent Offices 5. and only in that event. If he sees no likelihood.282 WIPO Intellectual Property Handbook: Policy. if Chapter II is applicable) from the priority date. the international preliminary examination report. subject to specific exceptions arising out of the PCT procedure. The furnishing of the translation and the payment of the national fees must be effected within 20 months (or 30 months. and he has not appointed local agents: all this is required under the traditional Paris Convention route within 12 months from the priority date. (Section IV — Notices and Information of a General Character).290 More and more Patent Offices are having to consider how to employ their available manpower to the greatest advantage. and in the PCT Newsletter. Law and Use designated Office is entitled to receive. he can either withdraw his application or do nothing. Further information is regularly published in the PCT Gazette. Once national processing starts. the international application will lose the effect of a national application and the procedure will automatically come to an end. The applicant has in such a case saved himself great expense.288 Where the applicant decides to continue the procedure. upon specific request. a local agent may also have to be appointed. The World Wide Web address is: http://www. he must pay the prescribed national fees to the designated (or elected) Offices and. namely. the number will surely rise considerably in the future as a consequence of an increase in the country’s industrial .287 After having received an international search report and. where appropriate. 5. a monthly publication which contains up to date news about the PCT. Prosecution Before the Designated or Elected Offices (the “National Phase”) 5. He has not paid for applications and translations for the national Offices. the applicant is now in a good position to decide whether he has a chance of obtaining patents in the designated States. furnish to these Offices translations of his international application into their official language. which is afforded under the PCT by the international search report and. This is true not only because of the number of patent applications which they must handle (in a country in the process of development. relating to the national phase. Volume II contains information on the procedure before the designated and elected Offices. unless the applicant requests an earlier start. copies (on paper) of the international applications and of related documents in which it is designated. Volume I of this Guide contains general information for users of the PCT. the normal national procedures apply. for example. and after having had the possibility of amending his application. optionally. the costs involved in filing separate national applications under the traditional Paris Convention route. relating to the international phase.wipo.289 WIPO has published a PCT Applicant’s Guide. in the latter case. WIPO’s home page on the Internet includes the PCT Applicant’s Guide and the PCT Newsletter as well as other information of a general nature on the PCT.286 The processing of an international application before the designated (or elected) Offices — the national phase — may not start prior to the expiration of 20 months (or 30 months if Chapter II is applicable) from the priority date of the international application. 5. 5. and must be done without having the basis for evaluating the likelihood of obtaining a patent. he has not paid fees to those Offices. if required. an international preliminary examination report. matters of form and contents of the international application. and the provision of copies of the priority document.

He must prepare translations of his application and have them put into a different form for each country. that application. Countries having a different official language may limit themselves to publishing only a translation of the abstract which accompanies international applications. Copies of the full text of the international application could be supplied upon request to interested parties.International Treaties and Conventions on Intellectual Property 283 activity) but also because of the expanding role that Patent Offices are being required to fulfil: they provide technical advisory services to local industry (because of available patent documentation and technically trained staff).298 If the applicant does not use the international procedure offered by the PCT. which is accompanied by an international search report and possibly by an international preliminary examination report. with effect in all States he has designated.293 The PCT does not affect the revenue of designated Offices unless they decide voluntarily to give a rebate on national fees in view of the savings they make through the PCT. 5.296 Patent Offices of States party to the Harare Protocol. and in order to make the use of the international application route more attractive to the applicant. This will put the Office. they have spent much less money in the stage prior to a granted patent than otherwise. In a typical case. where applicable. In any case. in respect of most applications filed by foreigners. and have more time to make up their minds as to those foreign countries in which they wish to seek protection. since those applications coming via the PCT have already been verified with regard to compliance with formal requirements during the international phase. in a much better position than under the system of filing national or regional applications. and the national industry affected by a patent and/or interested in licensing. The PCT assists Patent Offices in meeting these demands in various ways. Choosing this option is therefore particularly advisable if the national Patent Office is less well equipped than the regional Office and is not prepared to receive and process increasing numbers of applications. 5. either in terms of advising on available technologies or in connection with national research and development activities. within the priority year.Chapter 5 . with the competent regional Office. he must start preparations for filing abroad three to six months before the expiration of the priority period. the most profitable source of revenue for most Offices is from annual or renewal fees.292 Patent Offices can save part of the cost of publishing. 5. outlined in the following paragraphs.295 Non-examining Offices receive an application which has already been examined as to form. 5. they can forgo publication altogether. 5. 5. Advantages for the Applicant 5. National authorities involved in approving licensing agreements likewise benefit from the greater value of a patent granted on the basis of an international application. If the international application has been published in an official language of the country.297 Applicants may file their application in their own country (or. 5. which may be . which are not affected by the Treaty. or with the International Bureau as receiving Office) with effect in foreign countries. from an international search report and an international preliminary examination report.291 Patent Offices can expect to employ their available manpower to handle more patent applications. Under the PCT. the applicant files only one application (the international application). to the Eurasian Patent Convention or to the European Patent Convention which opt to close the national route are not involved in the processing of international applications designating such States. Their search costs are also thereby reduced.294 Examining Patent Offices benefit.

are needed. through the international publication of these applications. that there are sound economical and technical reasons for doing so. Thus patents granted on the basis of international applications will usually provide a sounder basis for investment and transfer of technologies.304 A further important advantage of the PCT for developing countries lies in its information effect. depending on the country concerned. but later than under a procedure which does not use the PCT. where available.299 The cost of further translation has to be met eventually. because the application will be published in one of the most important languages and. as well as the creation and modernization. an increasing number of nationals will use and greatly benefit from the PCT system when they seek patent protection abroad for their inventions. without constant stimulation of domestic inventive activities and at the same time importation (via licenses) of advanced technologies from foreign countries. with an not until eight (or 18) months only if the applicant. and since the patents granted through the PCT route have been subjected to high-quality international search and usually also international preliminary examination. 5. locally. 5. foreign investment will be stimulated. there will be increased levels of local employment and the technical skills of the local work force will be enhanced. etc.302 With more licensed technology. thus preparing the route for technology transfer and licensing agreements.) and services. Since foreign investors and licensors are relatively more interested in investing in and transferring technologies to a country whose economy is growing and where production costs are relatively low.301 Technological progress is an essential factor of national economic development. 5.300 International applications will be pursued in the national phase only if the applicant believes. It will be easier. of certain types of industries (manufacturers. because international applications are published 18 months after the priority date of the application. the PCT will often serve as an indispensable part of the country’s strategy to foster its growing economy and to promote the steady rise of its economic and technological level.284 WIPO Intellectual Property Handbook: Policy. is still interested in the countries concerned. It can be very difficult to obtain a complete picture of all the patent documents published in many countries and many languages and of the most recent state of the art resulting from them. Law and Use filed until the last day of the priority year. after seeing the results of the international search and usually also the international preliminary examination. Since the PCT system greatly facilitates the obtaining of patent protection on an international level. examination report also. And with more advanced technologies and more investment. more and more applicants are seeking patent protection on an international level through the PCT. and evaluated the international search report and. Since many important inventions are the subject of PCT applications. costs. Advantages for the National Economy and for Industry 5. may be identical both as to language and form with his own national application. he saves all subsequent . having the international preliminary If not. Technical Information 5. however industrialized. As the level of economic and technological development rises. thus aiding in the penetration of export markets by local industry. developing countries have.303 The economies of many developing countries are growing rapidly. The access will be early. where not in English. early and easier access to modern technological information. more investment and technology transfer in various areas. 5. It is recognized that real technological progress cannot be achieved or cannot continue in a country.

Background to the Treaty 5.309 When protection is sought in several countries for an invention involving a microorganism or the use of a microorganism. with one international depositary authority. Such preservation is costly. a copy of all published international applications. and because the international search report. irrespective of whether such authority is on or outside the territory of the said State. 5. entered into force on August 9.Chapter 5 . or the use of a microorganism. an invention is disclosed by means of a written description. the deposit of a microorganism with any “international depositary authority” (Article 3(1)(a)). which is not available to the public. whose preservation requires special expertise and equipment to keep them viable. In other words. That is why in the patent procedure of an increasing number of countries it is necessary not only to file a written description but also to deposit. Patent Offices of PCT Contracting States are entitled to receive.International Treaties and Conventions on Intellectual Property 285 English-language abstract.308 Disclosure of the invention is a generally recognized requirement for the grant of patents. one deposit. for such purposes. that the Treaty was concluded. of the PCT Gazette and of any other publication of general interest published by the International Bureau in connection with the PCT. 1980. Normally. will suffice for the purposes of patent procedure before the national Patent Offices (called “industrial property offices” in the Treaty) of all of the Contracting States and before any regional Patent Office (for example the . It was in order to eliminate or reduce such multiplication. Where an invention involves a microorganism. published together with the application. will make it easier to evaluate the technology disclosed in the application. 5. with a specialized institution. Summary of the Treaty 5. The States party to the Treaty are listed in the appropriate document in the back flap of this volume. 5. a sample of the microorganism.310 The main feature of the Treaty is that a Contracting State which allows or requires the deposit of microorganisms for the purposes of patent procedure must recognize. which is a special agreement under Article 19 of the Paris Convention. such a description is not always sufficient for disclosure. to protect them from contamination and to protect health or the environment from contamination.305 The PCT offers distinct advantages for developing countries participating in this system of international patent cooperation and requires no payment of contributions. free of charge. That there is sufficient awareness of these advantages is confirmed by the impressive number of developing countries already party to the Treaty.306 The States party to the Patent Cooperation Treaty are listed in the appropriate document to be found inserted in the back flap of this volume. Patent Offices are not equipped to handle microorganisms. The furnishing of samples also requires specialized expertise and equipment. The Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure 5. the complex and costly procedures of the deposit of the microorganism might have to be repeated in each of those countries. in order to enable one deposit to serve the purpose of all the deposits which would otherwise be necessary.307 The Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure (the Budapest Treaty).

311 What the Treaty calls an “international depositary authority” is a scientific institution — typically a “culture collection” — which is capable of storing microorganisms. an industrial property office will mainly be regarded as “interested” where the microorganism is needed for the purposes of patent procedure before the said office (Rule 11.1).2(ii)).1). roughly stated. that it will accept and store the deposited microorganisms and that it will furnish samples thereof to anyone entitled to such samples but to no one else.) under the same conditions. under the applicable law. comply with its assumed duties (Article 8).2(i)). he can deposit it only once. by the Contracting State on the territory of which it is located. for the international depositary authority to charge a fee for each deposit. The depositor himself has a right to a sample at any time (Rule 11. firm.313 The Treaty and the Regulations contain provisions allowing for what is called a “new” deposit where no samples of the originally deposited microorganism can be furnished (Article 4).3(a)). The said assurances may be furnished also by certain intergovernmental industrial property organizations (Article 7(1)(a)). an industrial property office to which the Treaty applies certifies that. or does not fully. the elements of the certification are provided for in detail to ensure that the maximum extent of caution will be exercised by the industrial property office before it issues a certification (Rule 11. and for all microorganisms deposited with an international depositary authority to be transferred to another such authority if the former is about to cease functioning as such (Rule 5. there will be at least one international depositary authority in the country of the depositor.312 The Regulations contain detailed provisions (Rule 11) on who is entitled — and when — to receive samples of the deposited microorganism. etc. with which he can deal in his own language.314 The Treaty is primarily advantageous to the depositor who is an applicant for patents in several countries. and will continue to comply. with the consequence that in all but one of the countries in which he seeks protection he will save the fees and costs that deposits would have otherwise entailed. for the purposes of the deposit of microorganisms. legal entity) to ask for a sample and such a third party will receive a sample upon producing such an authorization (Rule 11. . to any “depositor” (person. with one depositary. He may authorize any third party (authority. natural person. Main Advantages of the Treaty 5. In most cases. including. such a party has the right to a sample of the given microorganism. They also regulate the contents of the receipt that each international depositary authority is required to issue to the depositor for the deposited microorganism (Rule 7). in particular. Law and Use European Patent Office) which has filed a declaration of acceptance under Article 9(1)(a) of the Treaty. which means that he will deal with an authority which is close to him. 5. to which he can pay the fees in his own currency and which he may even know from personal experience. and provide for the testing of the viability of the deposited microorganisms and the issuance of viability statements (Rule 10). with the requirements specified in Article 6(2). 5. 5. for the termination or limitation of the status of international depositary authority at the will of the Contracting States where the said authority does not. instead of depositing the microorganism in each and every country in which he files a patent application referring to that microorganism. Any “interested” industrial property office to which the Treaty applies may ask for a sample and will receive one. It will save him money because. Such an institution acquires the status of “international depositary authority” through the furnishing. the fee covering the minimum 30 years during which the deposited microorganism must be stored (Rules 9 and 12). Any other party may obtain a sample if. They also contain provisions related to the applicability of the Treaty to intergovernmental industrial property organizations (Article 9). of assurances to the Director General of WIPO to the effect that the said institution complies. that it will be available.286 WIPO Intellectual Property Handbook: Policy.

instead of one year. the transformation of an international registration which is no longer protected because the basic mark has ceased to have effect in the country of origin. The system is administered by the International Bureau of WIPO. international or regional applications in some or all of the designated Contracting Parties. and the Protocol Relating to the Madrid Agreement. with the filing date.Chapter 5 .317 The system of international registration of marks is governed by two treaties.316 Finally. the United Kingdom and the United States of America. the member States may take away from the defaulting institution the status of international depositary authority. the said amount being diminished by the savings resulting from the international procedure.315 The security of the depositor is increased by the fact that. Consequently. It differs from the Agreement in offering such options as: a choice for the applicant. the Madrid Agreement Concerning the International Registration of Marks. if they are not so respected. it may be expected that the assurances will be strictly respected. of the international registration. a period of 18 months. which dates from 1891. was the absence from the Madrid Union of some of the major countries in the trademark field — for example. The Protocol is intended to make the Madrid system acceptable to more countries. 1995. for Contracting Parties to refuse protection. which maintains the International Register and publishes the WIPO Gazette of International Marks.International Treaties and Conventions on Intellectual Property 287 5.318 The reason for the much more recent Protocol. instead of a share in the revenue from the standard fees. 1996. - . which was adopted in 1989. Japan. with the possibility of a longer period in the case of a refusal based on an opposition. an “individual fee” whose amount may not be higher than the fees it charges for national or regional registration or renewal. 5. The Madrid Agreement Concerning the International Registration of Marks and the Protocol Relating to that Agreement Introduction 5. and where applicable the priority date. solemn assurances as to the seriousness and continued existence of that institution must be given. and came into operation on April 1. all the more so since. Common Regulations under the Agreement and Protocol also came into force on that last date. entered into force on December 1. allowing international registrations to be based on national applications and not only on national registrations. such assurances must be given by a State or by an intergovernmental industrial property organization and they are addressed to all the member States of the Budapest Union. 5. for an institution to become an international depositary authority. the possibility for the office of a designated Contracting Party to receive. following the original Madrid Agreement of 1891 (last amended at Stockholm in 1967). it is to be noted that adherence to the Treaty entails no financial burden or obligation for any Government.</